To,
The Members(s),
The Board of Directors hereby submits the 15th Annual Report of the business and operations of Shree Ram Proteins Limited ("the Company"), along with the audited financial statements, for the financial year ended March 31, 2023.
FINANCIAL RESULTS:
(AMOUNT' IN LAKHS)
YEAR AT A GLANCE:
FINANCIAL PERFORMANCE
The revenue from operations decreased to Rs. 16268.37 Lakhs as against Rs. 28779.70 Lakhs in the previous year. The revenue from operation was decreased by 43.47% over the previous year. The profit before Tax for the current year is Rs. 528.46 Lakhs as against the Profit before tax of Rs. 823.82 Lakhs in the previous year resulted into profit after tax of Rs. 384.53 Lakhs compared to Profit after tax of previous year Rs. 614.07 Lakhs. Decrease in net profit is due to decrease in revenue from operation.
DIVIDEND
To conserve the profit earned during the financial year 2022-23 for future purpose, your Directors regret to declare any dividend for the financial year 2022-23. (Previous year Nil). The Company does not have any amount of unclaimed or unpaid Dividends as on March 31, 2023.
AMOUNT TRANSFERRED TO RESERVE
During the year, the Company has not apportioned any amount to other reserve. The profit earned during the year has been carried to the carry forward credit balance of Profit and Loss account.
CHANGE IN NATURE OF BUSINESS
During the year, your Company has not changed its business or object and continues to be in the same line of business as per main object of the Company.
SHARE CAPITAL
As on March 31, 2023,
• The Authorized Capital of the Company is Rs. 25,00,00,000 divided into 25000000 Equity Shares of Rs. 10/- each.
• Issue, Subscribed & Paid-up Capital of the Company is Rs. 21,42,00,000 divided into 21420000 Equity Shares of Rs.10/- each.
During FY 2022-23, In Board Meeting held on January 31, 2023, Board of Directors approved raising of Funds through issuance of up to 10 Crores Equity Shares of Rs. 10 each ("equity Shares) to the existing equity Shareholders of the Company on Right Issue basis, on such terms and at such price and ratio as may be decided by the board or a duly constituted committee of the board at a later date, as on record date(to be notified subsequently), subject to receipt of regulatory/statutory approvals, in accordance with applicable laws including the Regulations of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018, SEBI (Listing Obligations and disclosure Requirements) Regulations 2015 and the Companies Act, 2013 and rules made thereunder, as amended from time to time ("Right Issue").
After Closure of the financial year;
• Authorised Capital of the Company increased from Rs. 25,00,00,000/- (Rupees Twenty Five Crores Only) divided into 25000000 (Two Crores Fifty Lakhs) Equity Shares of Rs. 10/-(Rupees Ten Only) each to Rs. 50,00,00,000/- (Rupees Fifty Crore Only) divided into 50000000 (Five Crores) Equity Shares of Rs. 10/-(Rupees Ten Only) each via postal ballot passed by the shareholders of the Company on Saturday, May 06, 2023.
• The company approved stock split of its Equity shares via sub-division of each of the Equity Share of the company having a face value of Rs. 10/- (Rupees Ten Only) each sub-divided into 1 (One) Equity Share having a face value of Rs. 1/- (Rupees One Only) each, approved via postal ballot resolution passed by the shareholders of the Company as Special Resolution on Saturday, May 06, 2023.
• Company approved raising of Funds through issuance of Upto 22,00,00,000 Equity Shares of Rs. 1 each ("equity Shares) by way of a rights issue to the eligible equity Shareholders of the Company on Right Issue basis, on such terms and at such price and ratio as may be decided by the board or a duly constituted committee of the board at a later date, as on record date(to be notified subsequently), subject to receipt of regulatory/statutory approvals, in accordance with applicable laws including the Regulations of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018, SEBI (Listing Obligations and disclosure Requirements) Regulations 2015 and the Companies Act, 2013 and rules made thereunder, as amended from time to time ("Right Issue"). Further The Board has constituted a rights issue committee and authorized its members to decide on the terms and conditions of the issue, including but not limited to, the final issue size/amount rights, entitlement ratio, the issue price, record date, timing of the Rights Issue, approval of draft letter of offer, appointment of intermediaries to issue, allotment of shares and other related matters.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Constitution of Board
The Constitution of the Board of Directors and other disclosure related to the Board of Directors are given in the Report on Corporate Governance.
Board Meeting
Regular meetings of the Board are held at least once in a quarter, inter-alia, to review the quarterly results of the Company. Additional Board meetings are convened, as and when required, to discuss and decide on various business policies, strategies and other businesses. The Board meetings are generally held at registered office of the Company.
During the year under review, Board of Directors of the Company met 6 (Six) times, viz April 25, 2022; June 21, 2022; July 15, 2022; October 12, 2022; December 19, 2022 and January 31, 2023.
The details of attendance of each Director at the Board Meetings and Annual General Meeting are given in the Report on Corporate Governance.
Disclosure by Directors
The Directors on the Board have submitted notice of interest under Section 184(1) of the Companies Act, 2013 i.e. in Form MBP-1, intimation under Section 164(2) of the Companies Act, 2013 i.e. in Form DIR 8 and declaration as to compliance with the Code of Conduct of the Company.
Independent Directors
In terms of Section 149 of the Companies Act, 2013 and rules made there under and Listing Regulations, the Company has three Non-Promoter Independent Directors. In the opinion of the Board of Directors, all three Independent Directors of the Company meet all the criteria mandated by Section 149 of the Companies Act, 2013 and rules made there under and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are Independent of Management.
A separate meeting of Independent Directors was held on January 31, 2023 to review the performance of Non-Independent Directors and Board as whole and performance of Chairperson of the Company including assessment of quality, quantity and timeliness of flow of information between Company management and Board that is necessary for the board of directors to effectively and reasonably perform their duties.
Further, in the opinion of the Board, all Independent Directors possess requisite qualifications, experience, expertise including the Proficiency and hold high standards of integrity for the purpose of Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014.
The terms and conditions of appointment of Independent Directors and Code for Independent Director are incorporated on the website of the Company at www.shreeramproteins.com.
The Company has received a declaration from the Independent Directors of the Company under Section 149(7) of Companies Act, 2013 and 16(1)(b) of Listing Regulations confirming that they meet criteria of Independence as per relevant provisions of Companies Act, 2013 for financial year 2022-23. The Board of Directors of the Company has taken on record the said declarations and confirmation as submitted by the Independent Directors after undertaking due assessment of the veracity of the same. In the opinion of the Board, they fulfill the conditions as Independent Directors and are independent of the Management. None of Independent Directors have resigned during the year.
During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, paid to them for the purpose of attending meetings of the Board / Committee of the Company.
Familiarization Program for Independent Directors:
The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying them in their appointment letter alongwith necessary documents, reports and internal policies to enable them to familiarize with the Company's Procedures and practices. The Company has through presentations at regular intervals, familiarized and updated the Independent Directors with the strategy, operations and functions of the Company and Agricultural Industry as a Whole and business model. The details of such familiarization programmes imparted to Independent Directors can be accessed on the website of the Company at https://www.shreeramproteins.com/public/media/report/file/direct link-1527072137.pdf
INFORMATION ON DIRECTORATE
As on date of this report, your Company's Board comprises 6 Directors viz., (1) Non-Executive Director, (1) Additional NonExecutive Director, (1) Non- executive Independent Director, (2) Additional Non- executive Independent Directors and (1) Executive Director, i.e. Managing Director.
a) Change in Board Composition:
Changes in Board Composition during the financial year 2022-23 and up to the date of this report is furnished below:
i. Mr. Ravindra Kumar Singh (DIN: 02786724) was appointed as Additional (Non-Executive) Director of the Company by the Board of Directors w.e.f June 21, 2022, at its Board meeting held on June 21, 2022, was regularized as on 14th Annual General Meeting (‘AGM') of your company, liable to retire by rotation.
ii. Mr. Ravindra Kumar Singh resigned from the position of Non-Executive Director of the Company, due to personal reasons and personal commitment, with effect from close of business hours of May 15, 2023.
iii. Mr. Navin Kumar Singh (DIN: 02786767) was appointed as an Additional Non-Executive Director on May 15, 2023 to hold the office up to the ensuring General Meeting or within a period of 3 (three) months from the date of appointment whichever is earlier, as per SEBI (LODR) Regulations, as amended.
iv. Appointment of Mr. Jaykumar Deepakbhai Khatnani (DIN: 08659187) as an Additional (Independent -NonExecutive) Director w.e.f June 16, 2023 to hold the office up to the ensuring General Meeting or within a period of 3 (three) months from the date of appointment whichever is earlier, as per SEBI (LODR) Regulations, as amended.
v. In the Board meeting held on June 16, 2023, Approved Appointment of Ms. Dipti Sharma (PAN: LWTPS3886E) as an Additional (Independent Non-Executive) Director w.e.f June 16, 2023 or the date of obtaining valid Director Identification Number (DIN) from Ministry of Corporate Affairs whichever is later to hold the office up to the ensuring General Meeting or within a period of 3 (three) months from the date of appointment whichever is earlier, as per SEBI (LODR) Regulations, as amended.
Ms. Dipti Sharma was allotted DIN on June 20, 2023 therefore her appointment is effective from June 20, 2023.
vi. Ms. Anushree Mahendrabhai Ganatra (DIN: 07973335), resigned from the position of Non-Executive Independent Director of the Company, i.e. w.e.f June 16, 2023 due to personal reasons and personal commitment.
vii. Nomination and Remuneration Committee and Board of Directors have recommended regularization of Mr. Navin Kumar Singh as Non-Executive Director, Mr. Jaykumar Deepakbhai Khatnani as Non-Executive Independent Director and Ms. Dipti Sharma as Non-Executive Independent Director of the Company in the ensuing Annual General Meeting to be held on Monday, August 14, 2023.
b) Retirement by rotation and subsequent re-appointment:
i. Mr. Lalitkumar Chandulal Vasoya (DIN: 02296254), Managing Director, is liable to retire by rotation at the ensuing Annual General Meeting, pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), and being eligible have offered himself for re-appointment.
Appropriate business for his re-appointment is being placed for the approval of the shareholders of the Company at the ensuing AGM. The brief resume of the Director and other related information has been detailed in the Notice convening the ensuing AGM of the Company.
The relevant details, as required under Regulation 36 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and Secretarial Standards-II issued by ICSI, of the person seeking re- appointment as Directors are annexed to the Notice convening the 15th Annual general meeting.
KEY MANAGERIAL PERSONNEL
During financial year 2022- 23, In accordance with Section 203 of the Companies Act, 2013, the Company has:-
1. Mr. Lalitkumar Chandulal Vasoya as Chairman and Managing Director of the Company,
2. Mr. Rameshbhai Popatbhai Bhadani Mr. Krutil K. Parakhia as a Chief Financial officer
3. Mr. Bhupendra Kanjibhai Bhadani acting as Company Secretary of the Company.
Further, there was no change in the Key Managerial Personnel of the Company during the financial year 2022-23.
However after completion of FY 2022-23, below changes took place in the position of Key Managerial Personnel:-
1. Mr. Rameshbhai Popatbhai Bhadani resigned from the post of Chief Financial officer w.e.f June 15, 2023;
2. Mr. Krutil K. Parakhia was appointed as a Chief Finance Officer of the Company w.e.f June 15, 2023.
PERFORMANCE EVALUATION
The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in the following manners;
• The performance of the board was evaluated by the board, after seeking inputs from all the directors, on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.
• The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
• The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
In addition, the chairman was also evaluated on the key aspects of his role.
Separate meeting of independent directors was held to evaluate the performance of non-independent directors, performance of the board as a whole and performance of the chairman, taking into account the views of executive directors and nonexecutive directors. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:
a) In preparation of annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed and that no material departures have been made from the same;
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 or loss of the Company for that year;
c) The Directors had 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) The Directors had prepared the annual accounts for the year ended March 31, 2023 on going concern basis.
e) The Directors had laid down the internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and
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.
COMMITTEES OF BOARD
In compliance with the requirement of applicable provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (the ‘SEBI (LODR) Regulations, 2015') and as part of the best governance practice, the Company has constituted following Committees of the Board.
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholder's Grievance & Relationship Committee
4. Corporate Social Responsibility (CSR) Committee
The composition of each of the above Committees, their respective role and responsibility are detailed in the Report on Corporate Governance annexed to this Report.
AUDIT COMMITTEE
The Company has formed Audit Committee in line with the provisions Section 177 of the Companies Act, 2013 and Regulation 18 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
As at March 31, 2023, the Audit Committee comprised Mr. Utsav Jagdish Rajpara (Non-Executive Independent Director) as Chairperson and Ms. Anushree Mahendrabhai Ganatra (Non-Executive Independent Director) and Ms. Rashmi Kamlesh Otavani (Non-Executive Independent Director) as Members.
After Closure of the financial year 2022-23, in the Board Meeting held on June 16, 2023, Ms. Anushree Mahendrabhai Ganatra tendered her resignation due to personal reasons and personal commitment as on June 16, 2023, and Mr. Utsav Jagdish Rajpara tendered his resignation due to personal reasons and personal commitment on June 20, 2023, due to which Company Reconstituted Audit Committee as below:-
Recommendations of Audit Committee, wherever/whenever given, have been accepted by the Board of Directors.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a whistle blower policy / vigil mechanism in compliance with the provision of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations, 2015 for the genuine concerns expresses by the employees and Directors about the unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct. The Company provides adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of employees and the Company. The Board has approved the policy for vigil mechanism which is available on the website of the Company at https://www.shreeramproteins.com/public/media/report/file/direct_link-1879416745.pdf
NOMINATION AND REMUNERATION POLICY/POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board has, on the recommendation of the Nomination & Remuneration Committee, formulated a policy on appointment and remuneration of Directors, Key Managerial personnel and Senior Management personnel , including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013.
Nomination and Remuneration Policy in the Company is designed to create a high performance culture. It enables the Company to attract motivated and retained manpower in competitive market, and to harmonize the aspirations of human resources consistent with the goals of the Company. The Company pays remuneration by way of salary to its Executive Directors, Key Managerial Personnel Annual increments are decided by the Nomination and Remuneration Committee within the salary scale approved by the members and are effective from April 01, of each year.
The Nomination and Remuneration Policy, as adopted by the Board of Directors, is placed on the website of the Company at https://www.shreeramproteins.com/public/media/report/file/direct_link-1879416471.pdf
REMUNERATION OF DIRECTORS
The details of remuneration/sitting fees paid during the financial year 2022-23 to Executive Directors/Directors of the Company is provided in Annual Return, i.e. Form MGT-7 which is uploaded on website of Company, i.e. at http://shreeramproteins.com/ and in Report on Corporate Governance which are the part of this report.
PUBLIC DEPOSITS
The Company has outstanding deposits of Rs. 387.72 Lacs which are deemed to be deposits in terms of provisions of Sections 73 of the Companies Act, 2013 and the rules made thereunder. The Company has not complied with the provisions of Sections 73 to 76 of the Companies Act, 2013 w.r.t above deposits outstanding as on the end of reporting period. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal in respect of the deposits outstanding in the Company during the period under review.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement for the year ended on March 31, 2023.
ANNUAL RETURN
The Annual Return of the Company as on March 31, 2023 is available on the Company's website and can be accessed at http://shreeramproteins.com/
TRANSACTIONS WITH RELATED PARTIES
All the Related Party Transactions entered into during the financial year were on an Arm's Length basis and in the
Ordinary Course of Business. No material significant Related Party Transactions (i.e. exceeding 10% of the annual consolidated turnover as per the last audited financial statement) with Promoters, Directors, Key Managerial Personnel (KMP) and other related parties which may have a potential conflict with the interest of the Company at large, were entered during the year by your 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.
Further, prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were placed before the Audit Committee and the Board of Directors for their approval on quarterly basis.
The details of the related party transactions for the financial year 2022-23 is given in notes of the financial statements which is part of Annual Report.
The Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company at http://shreeramproteins.com/investor#policy.
INTERNAL FINANCIAL CONTROL (IFC) SYSTEMS AND THEIR ADEQUACY
Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. Necessary internal control systems are also put in place by the Company on various activities across the board to ensure that business operations are directed towards attaining the stated organizational objectives with optimum utilization of the resources. Apart from these internal control procedures, a well-defined and established system of internal audit is in operation to independently review and strengthen these control measures, which is carried out by a reputed firm of Chartered Accountants. The audit is based on an internal audit plan, which is reviewed each year in consultation with the statutory auditor of the Company and the audit committee. The conduct of internal audit is oriented towards the review of internal controls and risks in its operations.
M/s. H.B Kalaria & Associates Chartered Accountants (FRN: 104571W), the statutory auditors of the Company has audited the financial statements included in this annual report and has issued an report annexed as an Annexure B to the Audit Report of the Company on our internal control over financial reporting (as defined in section 143 of Companies Act, 2013.
The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditor. Suggestions for improvement are considered and the audit committee follows up on corrective action. The audit committee also meets the statutory auditors of the Company to ascertain, inter alia, their views on the adequacy of Internal control systems and keeps the board of directors informed of its major- observations periodically. Based on its evaluation (as defined in section 177 of Companies Act 2013), our audit committee has concluded that, as of March 31, 203, our internal financial controls were adequate and operating effectively.
MATERIAL CHANGES AND COMMITMENT
There were no material changes and commitments, affecting the financial position of the Company, have occurred between the ends of financial year of the Company i.e. March 31, 2023 to the date of this Report.
However Company in its Board Meeting held on June 21, 2023, in supersession to earlier resolution passed for approval of Right Issue up to 10,00,00,000 Shares on January 31, 2023 approved, raising of Funds through issuance of Upto 22,00,00,000
Equity Shares of Rs. 1 each (“equity Shares) by way of a rights issue to the eligible equity Shareholders of the Company on
Right Issue basis, on such terms and at such price and ratio as may be decided by the board or a duly constituted committee of the board at a later date, as on record date(to be notified subsequently), subject to receipt of regulatory/statutory approvals, in accordance with applicable laws including the Regulations of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018, SEBI (Listing Obligations and disclosure Requirements) Regulations 2015 and the Companies Act, 2013 and rules made thereunder, as amended from time to time (“Right Issue”). Further The Board has constituted a rights issue committee and authorized its members to decide on the terms and conditions of the issue, including but not limited to, the final issue size/amount rights, entitlement ratio, the issue price, record date, timing of the Rights Issue, approval of draft letter of offer, appointment of intermediaries to issue, allotment of shares and other related matters.
PARTICULAR OF EMPLOYEES
The ratio of the remuneration of each director to the median of employees' remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure-C.
The statement containing top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to members excluding this annexure. In terms of Section 136 of the Act, the said annexure is open for inspection in electronic mode for Members. Any shareholder interested in obtaining a copy of the same may write to Company Secretary.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
To foster a positive workplace environment, free from harassment of any nature, we have institutionalized the Anti-Sexual Harassment Initiative (ASHI) framework, through which we address complaints of sexual harassment at the all workplaces of the Company. Our policy assures discretion and guarantees non-retaliation to complainants. We follow a gender-neutral approach in handling complaints of sexual harassment and we are compliant with the law of the land where we operate. The Company has setup an Internal Complaints Committee (ICC) for redressal of Complaints. During the financial year 2022-23, the Company has received nil complaints on sexual harassment, out of which nil complaints have been disposed off and nil complaints remained pending as of March 31, 2023.
RISK MANAGEMENT
A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact of risks identified and taking advance actions to mitigate it. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and non-business risks.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO A. Conservation of energy
i. The steps taken or impact on conservation of energy:
Company ensures that the operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.
ii. The steps taken by the Company for utilizing alternate sources of energy:
No alternate source has been adopted.
iii. The capital investment on energy conservation equipment: No specific investment has been made in reduction in energy consumption.
B. Technology absorption -
i. The effort made towards technology absorption: Not Applicable.
ii. The benefit derived like product improvement, cost reduction, product development or import substitution: Not Applicable
iii. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - NotApplicable
a) The details of technology imported: Nil.
b) The year of import: Not Applicable.
c) Whether the technology has been fully absorbed: Not Applicable.
d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not Applicable.
e) The expenditure incurred on Research and Development: Nil
f) Foreign Exchange Earnings & Expenditure:
i. Details of Foreign Exchange Earnings: 62.84 Lacs
ii. Details of Foreign Exchange Expenditure: Nil
Export revenue constituted 0.386% of the total revenue in financial year 2022-23.
CORPORATE GOVERNANCE
The Company's Corporate Governance philosophy is to continuously strive to attain higher levels of accountability, transparency, responsibility and fairness in all aspects of its operations. The Company remained committed towards protection and enhancement of overall long term value for all its stakeholders customers, lenders, employees and the society. The Company also acknowledges and appreciates its responsibility towards the society at large and has embarked upon various initiatives to accomplish this. As stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Report on Corporate Governance and Certificate of the Practicing Company Secretary with regards to compliance with the conditions of Corporate Governance is annexed to the Board's Report as Annexure D
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34(2)(e) read with part B of Schedule V of the SEBI (LODR) Regulations, 2015, Management Discussion and Analysis Report is forming the part of this Annual Report Annexure F
CORPORATE SOCIAL RESPONSIBILITY (CSR):
As per the audited financial statements as on March 31, 2023, the net profit of the Company is exceeding Rs. 5.00 Crore. As such, the Board of Directors of the Company in its meeting held on June 21, 2022 has constituted the Corporate Social Responsibility (CSR) Committee in accordance with the provisions of Section 135 of the Companies Act, 2013 and rules thereof. Further, the Board of Directors, on the recommendation of CSR Committee, has approved the Corporate Social Responsibility Policy on June 21, 2022. The CSR Policy is available on the website of the company at http://shreeramproteins.com/. The composition and terms of reference of the Committee are detailed in the enclosed Corporate Governance Report.
CSR initiatives and activities are aligned to the requirements of Section 135 of the Act. The Company constituted Corporate Social Responsibility Committee on June 21, 2022. During the FY 2022-23, we could not spend CSR obligation of Rs. 8, 56,308/- (Rupees Eight Lakh Fifty Six Thousand Three Hundred Eight Only) which is 2% of the average net profit of the past three financial years. However after the FY 2022-23, we made expenditure of CSR in Darul Uloom Moinul Islam, Run by Rahmania Charitable Sanstha, Ajmer.
The Company's CSR Policy Statement and Annual Report on the aforesaid CSR activities undertaken during the financial year ended 31st March, 2023, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in Annexure “G” to this report. CSR Policy is available on the Company's Website at https://www.shreeramproteins.com/public/media/report/file/direct_link-1687482285.pdf.
STATUTORY AUDITOR AND THEIR REPORT
M/s. H.B Kalaria & Associates, Chartered Accountants (Firm Registration No. 104571W) was re- appointed as Statutory Auditors of your Company in 13 th AGM held on September 30, 2022 for second term of 3 years to hold office till conclusion of the 16th Annual General Meeting (AGM) of the Companyto be held in the calendar year 2024.
In accordance with the Companies Amendment Act, 2017, enforced on May 7, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting and hence resolution for ratification of appointment of statutory auditor is not proposed by the Board of Directors. The Report given by the Auditors on the financial statement of the Company is part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report except:-
1. The Company has accepted deposits of Rs. 387.72 lacs which are deemed to be deposits during the current reporting period in terms of provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules made thereunder. The Company has not complied with the said provisions. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal in respect of the deposits accepted by the Company during the period under review.
Reply by management:- According to management, the sanction letter of the Lender Bank(s) does not permits to repay the unsecured loan taken by the company and moreover, as per management of the company such parties from whom such amount is accepted are friends and close relatives. In addition, company is in under Process of making repayment of such amount to such parties in consultation with the lender Bank(s).
2. There were undisputed amounts payable in arrears as at the balance sheet date for a period of more than six months from the date they became payable. The details of which are as follows:
Reply by management:- Company pays Income Tax to Department with Interest.
3. The Company has inadequate segregation of duties with respect to procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger; and record recurring and non-recurring adjustments to the financial statements.
4. The Company does not have an internal process to report deficiencies in internal control to management on a timely basis.
Reply by Management to Observation No. 3 and 4:-Company is in the process of streamlining Internal Control measures on suggestions of Statutory Auditors.
INTERNAL AUDITOR:
Pursuant to Section 138 of Companies Act 2013, the Company had appointed Ms. Mayuri Solanki, Chartered Accountant (Mem No. : - 608238) as an Internal Auditor of the Company for the FY 2022-23.
REPORTING OF FRAUD
The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/ INTERNAL AUDITOR:
Following is the significant and material order passed during the year under review:
Company was admitted in Corporate Insolvency Resolution Process (CIRP) under Section 9 of IBC, 2019 and moratorium is declared in terms of section 14(1) of IBC 2016, as per Hon'ble NCLT Ahmedabad, order dated January 11, 2023. NCLT admitted company into CIRP Proceeding for a claim of operational creditor, M/s, Mohini Health & Hygiene Limited amounting to Rs. 4,82,95,171/-(Including Rs. 1,21,82,419 as Invoice amount and Rs.3,61,12,752/- towards Interest amount @18% as per invoicing structure).
The details of litigation on tax and other relevant matters are disclosed in the Auditors' Report and Financial Statements which forms part of this Annual Report.
CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC)
During the Financial year 2022-23, a petition for initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016 filed by M/s. Mohini Health & Hygiene Limited (Operational Creditor) for a claim amounting to Rs. 4,82,95,171/-(Including Rs. 1,21,82,419 as Invoice amount and Rs.3,61,12,752/- towards Interest amount @18% as per invoicing structure), has been admitted against the Company vide Honorable National Company Law Tribunal, Ahmedabad bench order dated January 13, 2023.
Mr. Rajesh Lohia bearing registration number IBBI/IPA-002/IP-N00049/2016-17/10093 has been appointed as Interim Resolution Professional by NCLT, Ahmedabad Bench under Section 13(1) (c) for performing functions under Sections 17, 18, 20 and 21 of IBC, 2016. Also, moratorium was declared in terms of section 14(1) of IBC 2016 with the order of NCLT Tribunal.
Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR), company gave Public Announcement w.r.t commencement of a corporate Insolvency Resolution Process of Shree
Ram Proteins Limited vide NCLT Order (No. CP (IB) No.451 of 2018) dated January 11, 2023 published in "Times Nation", English Edition and "Jai Hind" Gujarati Edition on January 14, 2023.
Subsequently, Order dated January 11, 2023 passed by the Hon'ble National Company Law Tribunal, Ahmedabad, was appealed by company before the Hon'ble National Company Law Appellate Tribunal Principal Bench, New Delhi.
The Hon'ble National Company Law Appellate Tribunal Principal Bench Stay order dated January 11, 2023 vide Company Appeal (AT) (Insolvency) No. 84 of 2023 on January 25, 2023 and instructed Company (Appellant) to deposit amount of Rs.1,21,82,419/- within two weeks.
The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof- Not Applicable
MAINTENANCE OF COST RECORD
Pursuant to the provisions of the Companies Act, 2013 and rules thereof, the Board of Directors of the Company, in their meeting held on April 25, 2022, on the recommendation of the Audit Committee, have appointed M/s. Tadhani and Co., Cost Accountants, Rajkot (Firm Registration No.: 003635) as the Cost Auditor of the Company to audit the cost records of the Company for the financial year 2022-23. Further, as per Section 148 of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be ratified at the ensuing Annual General Meeting.
Pursuant to the provisions of the Companies Act, 2013 and rules thereof, the Board of Directors of the Company, in their meeting held on May 05, 2023, on the recommendation of the Audit Committee, have appointed M/s. Tadhani And Co., Cost Accountants, Rajkot (Firm Registration No.: 003635) as the Cost Auditor of the Company to audit the cost records of the Company for the financial year 2022- 23. M/s. Tadhani And Co, have confirmed that they are free from disqualification specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act and that their appointment meets the requirements of Section 141(3)(g) of the Act. They have further confirmed their independent status and an arm's length relationship with the Company. Further, as per Section 148 of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be ratified at the ensuing Annual General Meeting.
The Company has maintained cost accounts and records in accordance with provisions of Section 148 of the Companies Act, 2013 and rules thereof.
SECRETARIAL AUDITOR AND THEIR REPORT
The Company has appointed M/s. Payal Dhamecha & Associates, Practicing Company Secretaries, to conduct the secretarial audit of the Company for the financial year 2022-23, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial Audit Report for the financial year 2022-23 is annexed to this report as an ANNEXURE E1.
The Annual Secretarial Compliance Report for the financial year ended March 31, 2023 issued by M/s. Payal Dhamecha & Associates through their Partner Ms. Payal Dhamecha, in relation to compliance of all applicable SEBI Regulations/ Circulars/Guidelines issued thereunder, pursuant to requirement of Regulation 24A of the Listing Regulations read with Circular no. CIR/CFD/CMD1/27/2019 dated 8th February, 2019 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is annexed to this report as an ANNEXURE E2. The Secretarial Compliance Report has been voluntarily disclosed as a part of Annual Report as good disclosure practice.
There have been few common annotations reported by the above Secretarial Auditors in their Report with respect to:-
1. During the FY 2022-23, the promoter and Promoter group had entered into Contra Trade within a period of 6 months.
Management Reply: Promoters and Promoter group of your Company will take due care to comply with all regulations of SEBI PIT Regulations and other applicable regulations.
2. The promoters had not given Disclosures within 2 trading days of transaction or a series of transaction in a calendar quarter aggregating to a traded value of Rupees Ten Lakh Rupees under Regulation 7(2) of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015).
Management Reply: Promoters of your Company will take due care to comply all regulations w.r.t disclosures under SEBI PIT Regulations and other applicable regulations.
3. As per the amended provisions of regulation 23(9) of SEBI (LODR) Regulations, 2015, the company was required to file the related party transactions with the Stock Exchange (NSE) for Half Year ended on March 31, 2022 within 15 days from the date of publication of its standalone financial results. However, the company filed Related party transactions for half year ended on March 31, 2022 on May 16, 2022, resulting in delay of 6 days. NSE levied SOP Fine of Rs. Rs. 32,400 (Inclusive of Taxes) for this delayed compliance.
Management Reply: Your Company will now devise proper system for timely filing of compliances to stock exchange to avoid such penalties and will take due care to comply within due period.
4. As per Regulation 3(5) & 3(6) SEBI (Prohibition of Insider Trading) Regulations, 2015, Company has maintained internally Structured Digital Database in Digital Software for FY 2022-23 with adequate internal controls and checks such as time stamping and audit trails to ensure non-tampering of the database However there is a Delay by Company in entering of majority of UPSI Sharing Entries in software.
Management Reply: Management of Company will be more alert in making entries of UPSI Sharing into software the same day on which UPSI is shared to any Designated Persons. Delay was unintentional, to make all compliance within due date, UPSI sharing entries into software got delayed.
5. As per Schedule III- Part A Sub Clause 16 of SEBI LODR Regulations, 2015; i. Company has not intimated exchange on Filing of application by financial creditor for initiation of CIRP against the Company. ii. Delay in intimation of 1 day for Admission of Company in CIRP under Section 9 of IBC, 2019.
Management Reply: Company was expecting Stay Order on the CIRP Proceeding initialed by NCLT as there was a counter claim of Individual Promoter against M/s. Mohini Health & Hygiene Limited. Stay order was pronounced on January 25, 2023 and intimated the exchange on the same day.
6. As per Section 135(5) of Companies Act 2013, Company has not spent two per cent of the average net profits of the company made during the three immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy.
Management Reply: The Company constituted Corporate Social Responsibility Committee on June 21, 2022. During the FY 2022-23, we could not spend CSR obligation of Rs. 8, 56,308/- (Rupees Eight Lakh Fifty Six Thousand Three Hundred Eight Only) which is 2% of the average net profit of the past three financial years. However after the FY 2022-23, we made expenditure of CSR in Darul Uloom Moinul Islam, Run by Rahmania Charitable Sanstha, Ajmer.
7. Sitting Fees of Independent Director is less than Sitting Fees paid to other Independent Directors
Management Reply: We are into discussion with Independent Directors to make uniform payment of Sitting Fees to all the Independent Directors.
COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD 1 AND SECRETARIAL STANDARD 2
The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively. During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India, New Delhi.
GENERAL DISCLOSURE
Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134 (3) of the Act and Rule 8 of The Companies (Accounts) Rules, 2014 and other applicable provisions of the act and listing regulations, to the extent the transactions took place on those items during the year. Your Directors further state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review or they are not applicable to the Company; i. Issue of Equity Shares with differential rights as to dividend, voting or otherwise; ii. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and ESOS; iii. There is no revision in the Board Report or Financial Statement; iv. Information on subsidiary, associate and joint venture companies.
WEBSITE:
As per Regulation 46 of SEBI (LODR) Regulations, 2015, the Company has maintained a functional website namely www.shreeramproteins.com containing basic information about the Company. The website of the Company is also containing information like Policies, Shareholding Pattern, Financial Results and information of the designated officials of the Company who are responsible for assisting and handling investor grievances for the benefit of all stakeholders of the Company, etc.
APPRECIATIONS AND ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation for significant contributions made by the employees at all levels through their dedication, hard work and commitment during the year under review.
The Board places on record its appreciation for the support and co-operation your Company has been receiving from its suppliers, distributors, retailers, business partners and others associated with it as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be your Company's endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for and co-operation with each other, consistent with consumer interests.
Your Directors also take this opportunity to thank all Shareholders, Clients, Vendors, Banks, Government and Regulatory Authorities and Stock Exchanges, for their continued support.
Registered office:
Imperial Heights Tower-B, Second Floor, Office No. B-206, 150 Ft Ring Road, Opp. Big Bazar Rajkot-360005
Date: July 17, 2023 Place: Rajkot
For and on behalf of Board of Directors Shree Ram Proteins Limited
CIN: L01405GJ2008PLC054913