Your Directors hereby present their Annual Report, together with the audited accounts
of the Company for the financial year ended March 31, 2022.
1. PERFORMANCE OF THE COMPANY
1.1 Results
Your Company's performance for the year ended March 31, 2022 is as follows:
|
|
(RsMillions) |
Particulars |
2021-22 |
2020-21 |
Net Sales |
9,148.25 |
8,913.31 |
Other Income* |
38.26 |
22.59 |
Total Income |
9,186.51 |
8,935.90 |
Operating Expenses |
8,625.79 |
8,318.59 |
PBDIT |
560.72 |
617.31 |
Depreciation |
203.71 |
180.04 |
Interest |
24.24 |
17.74 |
Profit before Tax & exceptional item |
332.77 |
419.53 |
Exceptional item |
20.11 |
- |
Profit Before Tax (PBT) |
352.88 |
419.53 |
Taxes |
92.07 |
116.51 |
Profit After Tax (PAT) |
260.81 |
303.02 |
Other Comprehensive income # |
0.27 |
7.66 |
Total Comprehensive income |
261.08 |
310.68 |
*Includes other operating revenue
# Net of taxes
The Strategic Foods business of ATFL continued to show strong volume driven Revenue
Growth of 15% closing the year with over Rs 400 crore of Net Sales, though margins
weakened due to significant commodity price increases. The improved competitiveness of the
Premium Edible Oils business as a result of price corrections in FY'21 meant that the
Company was able to arrest a multi-year decline in Oils Gross Margin. And lastly your
Company further reduced the revenue exposure to commodity fluctuations with the
franchising of the Crystal brand effective November, 2021.
1.2 Key Indicators
FY'22 Gross Margin was lower than PY by Rs10 Crore, with a Rs13 Crore decrease in Foods
GM partly offset by a Rs3 crore increase in Edible Oils GM.
With a 15 year Revenue CAGR in the Foods business of 19% Your Company is clearly on
track to be amongst India's Best Performing Most Respected Food Companies. A diverse
portfolio of products in 5 fast growing Food categories and superior value propositions
combined with a moderate A&P model means that strong growth is clearly sustainable
driven by powerful inhouse manufacturing capabilities, best in class distribution network
and a robust flow of innovation.
2. DIVIDEND
Given the continued strong cash flow of the Company relative to the limited ongoing
Capital Expenditure of the Company, your Directors are pleased to recommend a Dividend of
Rs 3/- per equity share of the face value of Rs 10/- each for the year ended March 31,
2022 subject to the approval of the shareholders at the Annual General Meeting to be held
on June 29, 2022.
STATEMENT OF RETAINED EARNINGS (RsMillions)
Particulars |
2021-22 |
2020-21 |
a) At the beginning of the year |
3,407.13 |
3,167.39 |
b) Add: Profit for the year |
260.81 |
303.02 |
c) Add: Other Comprehensive |
|
|
Income (net of tax) |
0.27 |
7.66 |
d) Less: Dividends* |
71.43 |
70.94 |
e) At the end of the year |
3,596.78 |
3,407.13 |
* Dividend given to Agro Tech ESOP Trust excluded of
Rs 1.68 mm (Previous year Rs 2.16 mm).
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (hereinafter referred to as Listing Regulations'),
the Company adopted a Dividend Distribution Policy vide its Board meeting held on 22nd
July, 2021 in terms of the requirements of the Listing Regulations. The Policy is
available on the Company's website at https:/ /www.atfoods.com/pdf/code-of-conduct/
DividendDistributionPolicy.pdf.
3. RESPONSIBILITY STATEMENT
The Directors confirm that :
(a) in the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departures; (b) they 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;
(c) they 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) they have prepared the annual accounts on a going concern basis; (e)
they 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 (f) they
have devised proper systems to ensure compliance with the provisions of all applicable
laws and that such systems were adequate and operating effectively.
4. COVID- 19/Ukraine War
FY'22 was the second year of Covid-19 and Your Company continued to navigate the
pandemic in a manner that supported the safety of employees while undertaking the tasks
required to support the Company's strategic growth objectives. When required activities of
vulnerable groups were restricted at the Factories and Field Sales and market working
curtailed in the field to minimize risk to employees. Both the Corporate Office at
Gurugram and the Registered Office at Secunderabad have been largely closed and employees
encouraged to Work from Home. The last 2 years have seen significant supply chain
challenges which the Company has successfully navigated to ensure continued strong growth
in the Foods business. The war in Ukraine starting February, 2022 has further escalated
uncertainties in the supply chain. However, your Company is confident that it will be able
to navigate these new challenges and remain on track to join the ranks of India's Best
Performing Most Respected Food Companies with an increasingly diversified portfolio
designed to mitigate risks and ensure a consistent and strong performance.
5. CORPORATE GOVERNANCE
In terms of the Listing Regulations, a report on Corporate Governance along with
Auditors' Report on its compliance is annexed, forming part of the Annual Report.
Additionally, this contains compliance report signed by the CEO of the Company in
connection with compliance with the Code of Conduct, and also CEO/CFO Certification as
required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In line with the requirements of Companies Act, 2013, your Company has constituted the
Board Committees and has in place all the statutory Committees required under the law.
Details of Board Committees along with their terms of reference, composition and
meetings of the Board and Board Committees held during the year, are provided in the
Corporate Governance Report.
6. MANAGEMENT DISCUSSION & ANALYSIS REPORT
(MD&A)
Based on feedback from members on the Annual Report and Accounts, this report includes
MD&A as appropriate so that duplication and overlap between the Directors' Report and
a separate MD&A is avoided and the entire material is provided in a composite and
comprehensive document.
7. INDUSTRY STRUCTURE & DEVELOPMENTS
Continued and increasing involvement by consumers with Packaged Foods means that the
Food Industry is likely to demonstrate strong growth in the coming years. Key to securing
a profitable slice of this pie will however be broad based manufacturing capabilities with
a steady flow of innovation both of which will remain a focus for Your Company.
FY'22 continued to see significant disruption of the traditional trade by investments
in the ecommerce space providing as well an opportunity for newer and smaller players in
the Food industry. With the gradual lifting of restrictions and reduced fear we are
steadily seeing a more normal behavior and increased stability at a channel level with the
right balance between traditional trade, brick and mortar stores and the online space. The
powerful distribution network that Your Company has built with a retail coverage of
440,000 stores will remain a significant moat to support our product portfolio in the
categories of choice.
8. OPPORTUNITIES AND THREATS
The continued growth of the Indian Foods market represents an enormous opportunity for
a steady growth in Revenues and Profits for Your Company. The Company's powerful Foods
portfolio allows representation today in 5 fast growing categories Ready to Cook
Snacks, Ready to Eat Snacks, Spreads, Breakfast Cereals and Chocolates. Your Directors
believe that these categories are sufficient to power the Company into one of the
strongest Food Companies in India.
The primary threat to your Company's P&L has been the significant contribution of
the Edible Oils business. Over time however this has been significantly reduced and in
FY'22 the Foods business contributed to 44% of Sales and 56% of Gross Margin.
9. STATE OF THE COMPANY'S AFFAIRS
Your Company has registered a consistent growth of 19% (CAGR) in the Foods business
over the last 15 years through selective entry into fast growing categories. With a
continued focus on consumer acquisition through a strong Value for Money proposition, your
Company is able to deliver significantly superior products to competition at very
competitive prices. This has enabled the Company to significantly expand the product
portfolio including the launches in FY'22 of Ready to Cook Pasta & Noodle Kits and
Peanut Centre Chocolates.
In FY'22 the Ready to Cook category successfully crossed the Rs250 crore mark in
Revenues. Increased competitive activity hindered the growth of the Spreads category but
all other categories registered strong growth with necessary actions being taken on the
Spreads business.
The Company was successfully able to leverage in FY'22 the high-quality Distribution
Network in place with a coverage of 440,000 stores to enhance the distribution of its
portfolio. Media spends however saw some moderation to help manage the significant
commodity inflation the Company experienced during the year.
Your Company purchased land adjacent to two of its existing facilities during the year
at Kothur in Telangana and at Dhaka in Bangladesh. The land parcels will enable the
Company to increase the storage capabilities for Raw Materials/expand Production Space and
thereby improve efficiencies in the supply chain and support Growth.
10. PRODUCT CATEGORIES
10.1Ready to Cook Snacks:
Revenues from the Ready to Cook Snacks business increased by 17% in FY'22 driven by a
14% Volume growth with enhanced Pricing on the premium ranges of Popcorn and Sweet Corn.
The Company also introduced a range of Mini Meal Kits including Pasta and Noodles with
Prepared Sauces. These have been very well received in the market and the Company will
leverage the considerable expertise built in the development of the Popcorn category to
expand the Meal Kits category.
10.2Ready to Eat Snacks:
Revenues from the RTE Snacks business were higher than PY by 20% driven largely by
Volume Growth in the RTE Popcorn category where the Company saw reduced competitive
intensity. With 100% of low cashring SKU's of RTE Snacks now being shipped directly from
the factories the focus is now on ensuring the right combination of Full Truck Load
Product Mix with Distance from the Plants. FY'23 will also see the addition of Extruded
Panned products which will further help to improve the P&L of this category.
10.3Spreads & Dips:
Revenues from the Spreads business decreased by 2% as a consequence of low volume
growth in Peanut
Butter and price reductions in select SKU's to bring back Volume Growth and gain the
benefits of Operating Leverage at the Company's plant at Jhagadia. The results of the
actions are already visible in Modern Trade and E-Commerce where pricing realignment take
less time to be implemented. In Traditional Trade as well competitive presence is
beginning to wane and the Company expects to deliver the strong growth in FY'23.
10.4Breakfast Cereals:
Post the disruption caused by the 2nd Wave of Covid-19 the Company saw steady QOQ
growth in this category as it seeks to build a profitable presence in the Rs 3,500 crore
Breakfast Cereals category. Focus is on distribution expansion and trial generation of the
Company's products which offer exceptional quality with outstanding value.
10.5Chocolates:
The Company saw continued strong growth in the Coconut Duo Chocolate product driven by
the Rs. 10 offering. FY'23 also saw the commencement of testing of a Peanut Duo Variant
which has also been extremely well received. Focus is now on increasing capacity with
doubling of capacity planned in Q1, FY'23 and then doubling again in Q3, FY'23. The
Company expects the category to be a sizeable and profitable contributor to the total
Foods business going forward.
10.6Premium Edible Oils/Staples:
The Company's new price premiums have been well accepted which is visible in the Volume
Performance of FY'22. Work is now underway to assess how to use this Category to
contribute not only in financial terms to the P&L but as well in operational terms in
the development of the Foods business.
10.7Mass Edible Oils/Staples:
The Company further reduced the exposure to revenue fluctuations due to this category
with the franchising of Crystal effective November, 2021. Going forward the Company will
further evaluate options in this business.
11. RESEARCH, QUALITY & INNOVATION (RQI)
Innovation remains the driver of growth for your Company and we continue to make
investments which ensure that we deliver to consumers products which address unmet
consumer needs.
12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
A Statement giving details of conservation of energy, technology absorption and foreign
exchange earnings and outgo in accordance with Rule 8(3) of the Companies (Accounts)
Rules, 2014 is attached as Annexure A and forms part of this report.
13. HUMAN RESOURCES / INDUSTRIAL RELATIONS
Engaged Employees are critical to the success of your Company. In FY'22, your Company
successfully achieved an Engagement Score of 78%. The continuing strong momentum in the
Company driven by solid Foods growth and Innovation has helped to achieve this level.
Your Company will continue to ensure that we have a highly engaged and productive
organization to deliver against our vision of being amongst "India's Best Performing
Most Respected Food Companies"
14. KEY FINANCIAL RATIOS
The details of significant changes in the key financial ratios are as follows:
Particulars |
2021-22 |
2020-21 |
%Variance |
(i) Debtors Turnover Ratio |
15.73 |
15.95 |
(1.4%) |
(ii) Interest Coverage Ratio |
15.56 |
24.64 |
(36.9%) |
(iii) Current Ratio |
1.96 |
2.34 |
(16.3%) |
(iv) Inventory Turnover Ratio |
4.52 |
6.22 |
(27.3%) |
15. RETURN ON NET WORTH
The Return on Net worth as compared to the immediately previous financial year is as
follows:
Particulars |
2021-22 |
2020-21 |
(i) Return on Net Worth |
5.67% |
6.98% |
16. PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act, 2013 read with
Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Amendment Rules, 2016 thereunder in respect of the top ten employees in terms of
remuneration drawn and employees who were in receipt of remuneration aggregating Rs1.02
crores or more or were employed for part of the year and were in receipt of remuneration
aggregating Rs8.50 lakhs per month or more during the financial year ending March 31, 2022
is provided in the Annexure B forming part of this Report.
17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013
form part of the notes to the financial statements provided in this Annual Report.
18. PARTICULARS OF CONTRACTS WITH RELATED PARTIES
All contracts or arrangements or transactions entered into by the Company during the
financial year with related parties were in the ordinary course of business and on an
arm's length basis. During the year, the Company had not entered into any contract or
arrangement or transaction with related parties which could be considered material in
accordance with the policy of the Company on materiality of related party transactions,
Companies Act, 2013 and Listing Regulations. Form AOC-2 containing the note on the
aforesaid related party transactions is enclosed as Annexure C and forms part of
this Report.
The Policy on materiality of related party transactions and dealing with related party
transactions as approved by the Board may be accessed on the Company's website.:
https://www.atfoods.com/pdf/ c o d e - o f - c o n d u c t / p o l i c y _ d e a l i n g
_related_party_transactions.pdf The related party disclosures, including detail of
transaction with Promoter group, form part of the financial statements provided in this
Annual Report.
19. EMPLOYEE STOCK OPTION PLAN
The Company, vide special resolution in the Annual General Meeting of the Company held
on July 25, 2012 had approved "Agro Tech Employee Stock Option Plan"
("Plan"). The Plan was further modified vide special resolution in the Annual
General Meeting held on July 24, 2015 to align it with the provisions of SEBI (Share Based
Employee Benefits) Regulations, 2014 ("SEBI Regulations"). The Plan is further
amended and approved by the Nomination and Remuneration Committee in its meeting held on
April 28, 2022 to the extent to align it with the mandatory provisions of SEBI (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI Regulations")
and other applicable provisions for the time being in force. The Plan is administered by
Agro Tech ESOP Trust ("Trust") under the supervision of the Nomination and
Remuneration Committee of the Board of Directors of the Company ("Committee").
The Plan is in compliance with the provisions of SEBI Regulations. Further details of the
Plan are available on the website of the Company at www.atfoods.com
20. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Spend on the Company's Corporate Social Responsibility Program "Poshan" had
to be curtailed due to closure of Anganwadi centers as a consequence of Covid-19.
For FY21-22, the total amount required to be spent under CSR during the year was Rs
94,45,000/- which is 2% of average net profits of the Company during the three immediately
preceding financial years as required under section 135 of the Companies Act, 2013 and
relevant rules thereunder. The Company has transferred the required CSR amount of
Rs94,45,000/-to the Prime Minister's National Relief Fund in the month of March, 2022. The
unspent CSR amount of
Rs 95,84,450/- for FY20-21 was also transferred by the Company to Prime Minister's
National Relief Fund in the month of September 2021.
As per Companies Act, 2013 as amended by Companies (Amendment), Act, 2017, all
Companies having net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore or more
or a net profit of Rs 5 crore or more during the immediately preceding financial year will
be required to constitute a CSR Committee of the Board of Directors comprising three or
more directors, at least one of whom will be an Independent Director. Aligning with the
guidelines, the Company has constituted a CSR Committee comprising of Lt. Gen. D.B.Singh
as Chairman, Mr. Sanjaya Kulkarni, Mr. Narendra Ambwani, Mr. Arun Bewoor, Ms. Veena
Gidwani and Mr. James Patrick Kinnerk as its Members. The Committee is responsible for
formulating and monitoring the CSR Policy of the Company. The CSR Policy of the Company,
as approved by the Board of Directors is available on the Company's Website:
https://www.atfoods.com/pdf/code-of-conduct/ ATFL%20CSR%20POLICY.pdf The Annual Report on
CSR activities is annexed here with as Annexure D and forms part of this Report.
21. RISK MANAGEMENT POLICY
The Company has formulated and adopted a revised Risk Management Policy which has been
approved and adopted by the Board at the Board Meeting held on October 21, 2021 pursuant
to SEBI (LODR) (Second Amendment) Regulations, 2021, which requires top one thousand
listed Companies (based on market capitalization of every financial year) to formulate and
disclose a Risk Management Policy. The testing in accordance with the laid down policy is
being carried out periodically. The Senior Management has been having regular Meetings for
reassessing the risk environment and necessary steps are being taken to effectively
mitigate the identified risks. A Risk Management Committee also has been constituted with
a Committee of the Directors and senior management to address issues which may threaten
the existence of the company.
22. WHISTLE BLOWER POLICY (VIGIL MECHANISM)
The Vigil mechanism under Whistle Blower Policy has been approved by the Board of
Directors on October 17, 2014. This Whistle Blower Policy of the Company provides
opportunities to employees to access in good faith, to the Management, concerns (in
certain cases to the Audit Committee) in case they observe unethical or improper practices
(not necessarily a violation of law) in the Company and to secure those employees from
unfair termination and unfair prejudicial employment practices. The policy has also been
uploaded on the website of the Company :
https://www.atfoods.com/pdf/code-of-conduct/Whistle%20Blower%20Policy.pdf
23. INFORMATION SYSTEMS
Your Company continues to focus on the use of technology and automation to drive
productivity to work efficiently with our Customers & Suppliers while making available
to our Employees robust information to ensure best in class analysis of the business and
identification of opportunities to improve shareholder return.
24. FINANCE AND ACCOUNTS
24.1 Internal Controls
The Company has a robust system of internal controls commensurate with the size and
nature of its operations, to ensure orderly and efficient conduct of business. These
controls ensure safeguarding of assets, prevention, and detection of fraud and error,
accuracy and completeness of accounting records, timely preparation of reliable financial
information and adherence to the Company's policies, procedures and statutory obligations.
Your Company has established standard operating procedures for smooth and efficient
operations in addition to ensuring internal controls. Your Company has also documented:
A comprehensive Code of Conduct for the Board Members and employees of your
Company
An Employee Handbook
Whistle Blower Policy defined to provide channel of communication without fear
Comprehensive frame work for Risk Management, and
CEO/CFO Certification for Financial Reporting Controls to the Board The Company
has appointed M/s. Grant Thornton Bharat LLP as Internal Auditors to ensure adequacy of
internal control systems and make recommendations there to. Audit reports are circulated
to management, which takes prompt action as necessary.
The Audit Committee of the Board meets periodically to review the performance as
reported by Auditors. The Internal and External Auditors also attend the meetings and
convey their views on the adequacy of internal control systems as well as financial
disclosures. The Audit Committee also issues directives and/or recommendations for
enhancement in scope and coverage of specific areas, wherever felt necessary.
24.2. Cautionary Statement
Statements in this Directors' Report and Management Discussion and Analysis describing
the Company's objectives, projections, estimates and expectations may constitute
"forward looking statements" within the meaning of applicable laws and
regulations. Actual results may differ materially from those either expressed or implied.
24.3 Outlook
With a Foods Turnover in excess of Rs 400 crore and a proven 15 year CAGR of 19% your
Company is clearly well positioned to be a major player in the Foods industry in India.
This proposition is further strengthened by a strong portfolio and a powerful retail
distribution network which will ensure that with a relentless pursuit of Revenue and
Margin goals on the Foods business, your Company will become a significant player in the
Indian Foods Industry and join the ranks of India's Best Performing Most Respected Food
Companies.
25. DIRECTORS
In accordance with the provisions of Article 143 of the Articles of Association of the
Company, in so far as it is not inconsistent with the relevant provisions of the Companies
Act, 2013, Mr. James Patrick Kinnerk retires by rotation and being eligible, offers
himself for re-appointment. A brief profile of Mr. James Patrick Kinnerk is given in the
notice of the 35th Annual General Meeting.
During the year, Ms. Denise Lynn Hansen had resigned as Director of the Company. The
Directors placed on record their appreciation of the valuable services rendered and wise
counsel given by Ms. Denise Lynn Hansen during her tenure of Office as Director. Mr. Pedro
Labayen de Inza is being appointed as an Additional Director of the Company pursuant to
the provisions of Section 161(1) of the Companies Act, 2013 and Article 130 of the
Articles of Association of the Company.
He holds office up to the date of the ensuing Annual General Meeting. Notice together
with the deposit, as required under Section 160 of the Companies Act, 2013 has been
received from a Member proposing the appointment of Mr. Pedro Labayen de Inza as Director
of the Company at the Annual General Meeting. The Nomination and remuneration committee
has recommended the appointment of Mr. Pedro Labayen de Inza as a Director of the Company.
A brief profile of Mr. Pedro Labayen de Inza is given in the notice of the 35th Annual
General Meeting. All the Independent Directors of the Company have also given a
confirmation to the Company as provided under Section 149(6) of the Companies Act, 2013
and Regulation 25(8) of SEBI (LODR) Regulations, 2015 that: a. they are persons of
integrity and possess relevant expertise and experience; b. i. they are or were not a
promoter of the Company or its holding, subsidiary or associate Company or member of the
promoter group of the company; ii. they are not related to promoters or other directors in
the Company, its holding, subsidiary or associate Company; c. they do not have or had any
pecuniary transaction or relationship other than remuneration as such director or having
transaction not exceeding ten percent of their total income or such amount as may be
prescribed with the company, its holding, subsidiary or associate Company, or their
promoters, or directors, during the three immediately preceding financial years or during
the current financial year; d. none of their relatives-(i) is holding any security of or
interest in the company, its holding, subsidiary or associate company during the three
immediately preceding financial years or during the current financial year: Provided that
the relative may hold security or interest in the company of face value not exceeding Rs
fifty lakh or two per cent of the paid-up capital of the company, its holding, subsidiary
or associate company or such higher sum as may be prescribed; (ii) is indebted to the
company, its holding, subsidiary or associate company or their promoters, or directors, in
excess of such amount as may be prescribed during the three immediately preceding
financial years or during the current financial year; (iii) has given a guarantee or
provided any security in connection with the indebtedness of any third person to the
company, its holding, subsidiary or associate company or their promoters, or directors of
such holding company, for such amount as may be prescribed during the three immediately
preceding financial years or during the current financial year; or (iv) has or had any
other pecuniary transaction or relationship with the company, its holding, subsidiary or
associate company, or their promoters, or directors, amounting to two percent or more of
its gross turnover or total income or fifty lakh rupees or such higher amount as may
prescribed from time to time, whichever is lower, singly or in combination with the
transactions referred to in sub-clause(i), (ii) or (iii) during the three immediately
preceding financial years or during the current financial year. e. neither they nor any of
their relatives(i) hold or has held the position of a key managerial personnel or is
or has been employee of the Company or its holding, subsidiary or associate Company in any
of the three financial years immediately preceding the financial year in which they were
proposed to be appointed; (ii) is or has been an employee or proprietor or a partner, in
any of the three financial years immediately preceding the financial year in which they
were proposed to be appointed, of(A) a firm of auditors or company secretaries in
practice or cost auditors of the Company or its holding, subsidiary or associate Company;
or (B) any legal or a consulting firm that has or had any transaction with the Company,
its holding, subsidiary or associate Company amounting to ten percent or more of the gross
turnover of such firm; (iii) held together with any relatives two percent or more of the
total voting power of the Company; or (iv) is a Chief Executive or director, by whatever
name called, of any non-profit organization that receives twenty-five per cent or more of
its receipts from the Company, any of its promoters, directors or its holding, subsidiary
or associate Company or that holds two percent or more of the total voting power of the
Company; (v) is a material supplier, service provider or customer or a lessor or lessee of
the Company; f. they are not a non-independent director of any other company on the board
of which any non-independent director of the Company is an independent director. g. they
are not aware of any circumstance or situation, which exist or may be reasonably
anticipated, that could impair or impact their ability to discharge their duties with an
objective independent judgment and without any external influence. h. they possess
appropriate skills, experience and knowledge in one or more fields of finance, law,
management, sales, marketing, administration, research, corporate governance, technical
operations or other disciplines related to the company's business. i. they have complied
with the requirement of sub-rule (1) and sub-rule (2) of Rule 6 of Companies (Appointment
and Qualification of Directors) Rules, 2014 with regard to inclusion of their names and/or
renewal thereof, in the Independent Directors data bank maintained with Indian Institute
of Corporate Affairs (IICA).
None of the independent Directors will retire at the ensuing Annual General Meeting.
26. MEETINGS OF THE BOARD
The Board of Directors met 4 times during the period April to March in the year
2021-2022 on the following dates:
1. April 29, 2021 |
2. July 22, 2021 |
3. October 21, 2021 |
4. January 20, 2022 |
27. AUDIT COMMITTEE
The Company's Audit Committee presently comprises of five Directors, all are
non-executive and Independent Directors. This is in compliance with Companies Act, 2013
and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Lt.Gen.
D. B. Singh, an Independent Director, is the Chairman of the Committee while Mr. Sanjaya
Kulkarni, Mr. Narendra Ambwani, Mr. Arun Bewoor and Ms. Veena Gidwani are its Members. The
Charter of the Committee is in line with the requirements of Section177 of the Companies
Act, 2013 and the relevant clauses of the Listing Regulations.
28. CRITERIA FOR REMUNERATING DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
The performance of the Company's Key Managerial Personnel, Whole time Director and
Employees is measured on the progress being made on the strategic vision of the Company
and Profitability. Progress against the strategic vision of the Company is measured by
continued improvement in Gross Margin and share of the Foods business in the total Net
Sales of the Company. Profitability is measured using Profit After Tax as a single
measure.
The details as required under Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is being provided as an Annexure B to this
Report.
29. EVALUATION OF THE BOARD
The Company has formulated a Remuneration Policy in line with the requirements of the
Companies Act, 2013. The performance evaluation of independent directors is done by the
entire Board of Directors (excluding the director being evaluated). On the basis of the
report of performance evaluation, it shall be determined whether to extend or continue the
term of appointment of the independent directors. The annual evaluation of the Board is
done at three levels as (i) Board as a whole; (ii) Committees of the Board and (iii)
Individual Directors and Chairperson.
A detailed Questionnaire is circulated to all individual directors. The Directors are
evaluated on the basis of the following performance evaluation criteria namely knowledge
and competency, fulfillment of functions, ability to function as a team, initiative,
availability and attendance, commitment, contribution and Integrity. The Additional
criteria for Independent directors are independence, independent views and judgment. The
remuneration/commission to Non-Executive and Independent Directors shall be fixed as per
the provisions contained under Companies Act, 2013. The Non-Executive Independent Director
may receive remuneration by way of fees for attending each meeting of Board or Committee
thereof, provided that the amount of such fees shall not exceed Rs1,00,000/-
(Rs One lakh only) per meeting of the Board or Committee or such amount as may be
prescribed by the Central Government from time to time.
For Independent Women Directors, the sitting fee paid is not less than the sitting fee
payable to other directors.
Commission may be paid within the monetary ceiling limit approved by shareholders,
subject to the limit not exceeding 1% of the profits of the Company computed as per the
applicable provisions of the Act. An Independent Director shall not be entitled to any
stock options of the Company.
Copy of the Nomination and Remuneration policy is annexed here with as Annexure E
and forms part of this Report and is also uploaded on the website of the Company:
https://www.atfoods.com/pdf/code-of-c o n d u c t / N o m i n a t i o n % 2 0 a n d %
20Remuneration%20Policy.pdf
30. TRAINING OF INDEPENDENT DIRECTORS
Every new Independent Director of the Board attends an orientation. To familiarize the
new inductees with the strategy, operations, business and functions of your Company, the
Senior Management make presentations to the inductees about the Company's strategy,
operations and products. The Company also encourages and supports its Directors to update
themselves with the rapidly changing regulatory environment. Also, at the time of
appointment of independent directors, the Company issues a formal letter of appointment
describing their roles, functions, duties and responsibilities as a Director. During the
year, the Company has sponsored independent Directors for attending an online orientation
programme conducted by National Institute of Securities Markets (NISM) on role of the
Board, regulatory perspective on role & responsibilities of Directors etc. More
details about familiarization Programme are uploaded on Company's website:
https://www.atfoods.com/pdf/ other-information/familiarisation_programme_
independent_directors.pdf
31. AUDITORS
M/s Deloitte Haskins & Sells LLP, Chartered Accountants, were appointed as the
Statutory Auditors of the Company by the shareholders' at the 32nd Annual General Meeting
held on July 17, 2019, to hold office from the conclusion of the 32nd Annual General
Meeting till the conclusion of the 37th Annual General Meeting.
The Report given by the Auditors M/s Deloitte Haskins & Sells LLP, Chartered
Accountants on the financial statements of the Company for financial year 2021- 22 is part
of the Annual Report. There has been no qualification, reservation or adverse remark or
disclaimer in their Report. During the year under review, the Auditors had not reported
any matter under Section 143(12) of the Companies Act, 2013 and hence, no detail is
required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.
32. COST AUDIT
The Company is required to maintain the cost records as specified by the Central
Government under Section 148(1) of the Companies Act, 2013 and accordingly such accounts
and records are made and maintained by the Company. An Audit of the Cost Accounts
maintained by the Company is also conducted by a Cost Auditor appointed by the Board
subject to the approval of Shareholders.
33. SECRETARIAL AUDIT
M/s. Tumuluru & Company, Company Secretaries Firm has been appointed to conduct the
Secretarial Audit of the Company as required under the provisions of Section 204 of the
Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (LODR) Regulations, 2015
and also to provide the Secretarial Compliance Report for the financial year 2021-22. Copy
of the Secretarial Audit Report in Form MR-3 is given as an Annexure F to this
Director's Report. The Secretarial Audit Report does not contain any qualification or
adverse remarks.
34. SUBSIDIARY COMPANIES
Your subsidiary, Sundrop Foods India Private Limited has continued to perform the role
of aiding the Company's expansion of distribution and display of your Company's products.
At the end of FY'22 the number of sales staff on the rolls of the Company were 379.
Your Company's wholly owned subsidiary Agro Tech Foods (Bangladesh) Pvt. Ltd continues
to scale up production as we expand our business in a neighboring emerging market with
strong growth potential. Your Company will also be working towards leveraging your
Company's wholly-owned subsidiary Sundrop Foods Lanka (Private) Limited at an opportune
time basis the economic developments in that market. During the year, the Board of
Directors reviewed the affairs of the subsidiary Companies. The Company has published the
audited consolidated financial statements for the financial year 2021-22 and the same
forms part of this Annual Report. This Annual Report does not contain the financial
statements of our subsidiaries. The statements highlighting the summary of the financial
performance of the subsidiaries in the prescribed format is annexed as Annexure G
to this Report. The audited financial statements and related information of subsidiaries
are available for inspection electronically and will be provided to any shareholder on
demand. The separate audited financial statements in respect of each subsidiary Company is
also available on the website of your Company. https:/
/www.atfoods.com/annual-reports.aspx
35. ANNUAL RETURN
A copy of the Annual Return as provided under Section 92(3) of the Companies Act, 2013
and Rule12 of the Companies (Management & Administration) Rules, 2014 prepared as on
March 31, 2022 shall be placed on the website of the Company and the same is available in
the Company's website: https:// www.atfoods.com/investors-information.aspx
36. BUSINESS RESPONSIBILITY REPORT
SEBI (LODR) (Fifth Amendment) Regulations, 2019 notified on December 26, 2019 mandated
inclusion of Business Responsibility Report (BRR) as part of the Annual Report for top
1000 listed entities based on market capitalization. In compliance with the Regulation,
the BRR for FY 2021-22 is provided as part of this Annual Report.
37. GENERAL
Your Directors state that no disclosures or reporting are being made in respect of the
following items as there were no applicable transactions or events on these items during
the year under review: a. Details relating to deposits covered under Chapter V of the Act.
b. Issue of equity shares with differential rights as to dividend, voting or otherwise. c.
Issue of shares (including sweat equity shares) to employees of the Company under any
scheme save and except under the ESOP scheme referred to in this Report. d. The Managing
Director of the Company does not receive any remuneration or commission from any of its
subsidiaries. e. No significant or material orders were passed by the Regulators or Courts
or Tribunals which impact the going concern status and Company's operations in future. f.
The Company has complied with the provisions relating to constitution of Internal
Complaints Committee and no cases reported or filed during the year pursuant to the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. g.
During the year, your Company has not accepted any public deposits under Chapter V of
Companies Act, 2013. h. Pursuant to Section 124 and Section 125 of the Companies Act 2013
read with IEPFA (Accounting, Audit, Transfer and Refund) Rules 2016 and any amendment
thereof, as may be applicable, an amount of Rs446,238/-which remained unpaid / unclaimed
dividends pertaining to FY13-14 was transferred to Investor Education and Protection Fund
on September 14, 2021. i. During the year, the Company has transferred 8434 unclaimed
shares to IEPF account on October 11, 2021. The detailed list of unclaimed shares
transferred to IEPF Authority is available in the Company's website www.atfoods.com j.
Pursuant to Section 124 and Section 125 of the Companies Act 2013 read with IEPFA
(Accounting, Audit, Transfer and Refund) Rules 2016 and any amendment thereof, as may be
applicable, an amount of Rs 467,946/- (as on March 31, 2022) of unpaid/unclaimed dividends
pertaining to FY 14-15 will be transferred to Investor Education and Protection Fund
within the prescribed timelines.
K. Except as disclosed elsewhere in the Report, there have been no material changes and
commitments made between the end of the financial year of the Company and the date of this
Report. There has been no change in the nature of business of the Company during the year.
l. No application was made during the year and no proceeding is pending under the
Insolvency and Bankruptcy Code, 2016 (31 of 2016) as at the end of the financial year. m.
No instance of the valuation was required for one time settlement and no valuation was
done while taking the loan from the Banks or Financial Institutions.
38. APPRECIATION
The Board places on record their appreciation for the contribution of its customers,
employees, distributors, co-packers, suppliers and all other stakeholders towards
performance of the Company during the year under review.
On Behalf of the Board |
|
Sachin Gopal |
Lt. Gen. D.B. Singh |
Managing Director & CEO |
Director |
DIN 07439079 |
DIN 00239637 |
Place : Gurugram |
|
Date : April 28, 2022 |
|
|