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Sukhjit Starch & Chemicals Ltd
Industry :  Miscellaneous
BSE Code
ISIN Demat
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As on: Jan 20, 2022 07:32 AM

Dear Share Holders :

Your Directors are pleased to present before you the 77th Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2021

1. FINANCIAL RESULTS 2020-21 2019-20
(Rs in Crores) (Rs in Crores)
Sales & Other income 702.78 805.24
Earning before Interest, tax and Depreciation 68.56 64.55
- Less Interest 20.58 18.16
- Depreciation 17.72 13.35
Profit before tax 30.26 33.04
- Provision for taxes 6.25 8.93
- Deferred Tax/(Deferred Tax written back) 1.40 (9.40)
Profit After Tax 22.61 33.51
Surplus brought forward from previous year 34.12 25.61
Transfer to General Reserves 25.00 25.00
Dividend for the F.Y. 2019-20 2.95 -
Surplus carried forward 28.78 34.12


The National lockdown in March, 2020 and imposition of Curfew in some states due to outbreak of Covid-19 Pandemic, which being a necessary step to contain the spread, posed serious challenges to the Trade & Industry putting supply chains out of order across the Country. It caused serious disruption to the operations of the Company in some states where intensity of the pandemic was severe and resulted in temporary shutdown of the units in those states. However, Company ensured that there was no lay off or retrenchment of its workmen and all out efforts were made to secure and protect the workmen & their families from the pandemic. Overall operations of the Company were badly bruised during the 1st two quarters of the year. However, things improved in the 3rd quarter with normal working getting restored in the 4th quarter at all our units located in different states. The Sales & Other Income of the Company which was merely Rs 287.26 Cr. in the 1 st half of the year got improved to Rs 415.52 Cr. in the 2nd half with annual turnover at Rs 702.78 Cr. against Rs 805.24 Cr. during the previous year.

The Earnings Before Interest, Tax and depreciation is Rs 68.56 Cr. (Rs 64.53 Cr.) which after interest of Rs 20.58 Cr. (Rs 18.16 Cr.) and depreciation of Rs 17.72 Cr. (Rs 13.35 Cr.) resulted in a net profit before tax of Rs 30.26 Cr. (Rs 33.04 Cr.). The higher charge of Interest & Depreciation is owing to the capitalisation and operationalization of the newly setup maize processing facility of the Company in the state of Punjab. The net profit after tax has come down from Rs 33.51 Cr. to Rs 22.61 Cr. this year. This is due to the write back of the deferred tax liability of Rs 9.02 Cr. during FY 2019-20, on its re-measurement, pursuant to the Taxation (Amendment) Ordinance, 2019 issued by Ministry of Law and Justice on 20th September 2019, effective from 1st April 2019. However, the overall EBITA % has improved significantly during the year i.e. by about 1.75%.


Re-emergence of the 2nd wave of Covid in April, 21 has led to some restricted lockdown in some States where our units are located impacting our operations in the month of May, 21. Going forward we feel that the second wave is likely to subside by June, 21 & the third wave may not hit our country with that severity due to vaccination and other preventive measures being undertaken by the Government. With the prediction of normal monsoons during the running year, it is expected that high production of agriculture produce will improve the availability of basic raw material at an optimum cost. This will also ensure continuous supply of raw material at an optimum cost at all plant locations of the Company. The Company is trying to optimize the capacity utilization at the existing units. The turnover of the Company is likely to grow by over 30% owing to the full year operations of the Company's new unit at Rehana Jattan, Phagwara which was commissioned and operationalized in Nov, 20.


The Directors are pleased to recommend a dividend of 30% (i.e. Rs 3/- per Equity Share of Rs10/- each) during the financial year ended 31st March, 2021 against dividend 20% (i.e. Rs. 2/- per equity share of Rs 10/- each) paid in 2019-20. The outflow on account of the dividend will be Rs 4.43 Cr (P.Y. Rs 2.95 Cr.). The payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company.


The Credit Analysis & Research Limited (CARE), owing to the adverse impact of COVID-19 on the operations of the Company (although temporary), has reviewed and accorded the rating CARE A for the long term borrowings of the Company and CARE A1 for the short term borrowing of the Company.

The Current Assets of the Company stood at Rs 221.31 crores as compared to Rs 254.25 crores on 31.03.2020 including Inventories at Rs 100.85 crores on 31.03.2021 against Rs 152.10 crores in the previous year. The Non Current Assets have increased to Rs 484.96 Crores (Net) on 31.03.2021 against Rs 454.66 crores on 31.03.2020 due to the additional cap-ex for the new maize processing facility in the state of Punjab. There is no major cap-ex planned for the running year. So, the Internal Accruals of the Company are set to strengthen the working capital position of the Company during FY22.

The Management believes that the Company has enough liquid resources at hand to meet any additional working capital requirements.


As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management's discussion and analysis report is annexed herewith marked as 'Annexure A' and forms a part of this report.


Your company is fully committed to the philosophy of transparency and believes in conducting its business with due compliance of all the applicable laws, rules and regulations. In compliance with 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'.


There is no change in the Equity Share Capital during the F.Y. 2020-21.


The Company has transferred Rs 25 crores (PY Rs 25 crores) to the general reserves.


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, 2021, 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 31.03.2021, 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.


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. It continues to provide engineering support to the manufacturing operations of the Company.However, its operations have also been badly hit due to Covid during the year under reference.

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 been already disposed off and efforts are on to realize the dues from its old customers.

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 has operationalised its project of the Mega Food Park in the state of Punjab, during the year under reference. The Company has created a State of Art Technology Infrastructure for setting up food processing units in the Mega Food Park. However, most of the potential investors deferred their fresh investments due to adverse effect of Pandemic on their existing business. The Company is expected to show up good performance during the running year after good part of its assets get leased out and operationalized.

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 with 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, 2021 is annexed to the consolidated results in the Annual Report. The annual accounts of these subsidiaries and the related detailed information will be made available to any shareholder of the Company who may be interested in seeking such information and are also available for inspection by any shareholder of the Company at the registered office of the Company during business hours. The Company shall place the annual accounts of subsidiaries on its website and shall provide the requisite information to any shareholder on demand.


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/ KMP are set out in the 'Annexure C to the Directors' Report.

However, in view of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there was no employee who is in receipt of remuneration over Rs1.02 crores p.a. if employed throughout the year or Rs 8.5 lacs p.m. if employed for a part of the year during 2020-21.


(a) Ms. Ruby Agrawal, one of the Independent Directors of the company has expressed her inability to continue as a Director of the Company due to her personal reasons and has resigned from the Directorship of the Company on 21.05.2021. The Board accepted the said resignation in their meeting held on May 31,2021 .The Board placed on record her rich contribution as a board member or as a member of the committees during her association with the Company as an Independent Director.

(b) Smt. Manjoo Sardana, a Non-Executive Director of the Company, is retiring by rotation and being eligible, offers herself for reappointment. Board recommends her reappointment as the Non-Executive Director of the Company.

(c) The Board considered the re-appointment of Sh. M.G. Sharma (DIN: 00398326), as Executive Director (Fin) & CFO of the Company with effect from 1st August, 2021 to 31st May, 2023.

Sh. M.G. Sharma has been associated with the Company from the last about four decades and heading finance and commercial functions of the company with due compliance of statutory Acts of the company from time to time. Fie is also actively involved in key areas like policy formulation, product planning & development, finance, procurement of raw materials, marketing of finished products and other commercial & administrative activities of the company.

The Board, therefore, in the overall interest of the company, recommends his re-appointment as Executive Director (Fin) & CFO with effect from 1st August, 2021 to 31st May, 2023.

(d) The Board co-opted Sh. Saravjit Singh Hothi (DIN:09182046), the former Air Vice Marshal at Indian Air Force, as an Independent Additional Director of the Company till the conclusion of the ensuing Annual General Meeting.

Sh. Saravjit Singh Hothi had an excellent career during his coveted service, spanning about 30 years, with Indian Air Force. Fie has to his credit excellent administrative & Managerial skills in commanding/ managing men & materials. Fie has been decorated twice by The President of India with prestigious medals like Vayu Sena Medal and Vashishth Sewa Medal.

Presently, he is proprietor of MSP, Jalandhar and associated with "The Knowledge Academy" (a UK based organisation) which provides training to the Corporate Professionals. Sh. Saravjit Singh Hothi has also done a course on 'Independent Directors Studies for Senior Officers of Armed Forces'.

Board recommends his appointment as an Independent Director of the Company and feel that his induction would further enrich the functioning of the Board of Directors.

(e) 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 sub section (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.

(f) 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/ Committee's/ Director's 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 and in the Meeting of the Nomination & Remuneration Committee of the Company both held on 29th January, 2021 reviewed the performance of Non- Independent Directors, the Board as a whole and also the Chairperson of the Company. The same was placed on record and discussed in the Board Meeting following the meeting of the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

The Board of Directors held four meetings during the year under reference and details thereof appear in report on Corporate Governance as per Annexure B of the Annual report.


Internal financial control systems of your company 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.


Pursuant to Section 177 of the Companies Act, 2013 & rules made there under and 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. Whistle Blower Policy of the Company stands placed on the Company's website at the link: https://www.sukhjitgroup.com/whistle-blower-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.


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 SEBI (LODR) Regulations, 2015, as applicable, besides other matters as referred by the Board of Directors from time to time. The primary objective of the audit committee is 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. The committee oversees the financial reporting process by the Management, the internal auditors and the independent auditors. All possible measures are taken by the committee 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 Chairman and Sh. Vikas Uppal, Smt. Ruby Agarwal and Sh. M.G. Sharma as its members. All recommendations made by the Audit Committee during the year were accepted by the Board.


(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 31/03/2021.

(ii) Unsecured Loans as on 31/03/2021 include Rs 6.30 crores (P.Y. Rs 5.77 crores) received from directors, 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 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 is no change in the nature of company's business during the year under review.

(vii) 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.

(viii) 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.

(ix) 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.

(x) There has been no default in repayment of deposits or payment of interest thereon during the year.

(xi) There was no instance during the year where the recommendations of any committee were not accepted by the Board.


The report on Corporate Social Responsibility activities carried out during the financial year 2020-21 is annexed herewith marked as 'Annexure D' to this report.


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 expected to have access to the Unpublished Price Sensitive Information relating to the Company.


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 by the Nomination and Remuneration Committee / Board / Shareholders as per applicable provisions of the Act. 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 arm's length price. In terms of IND AS-24, the details of such transactions are duly presented as per Point No. 7 of 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:



Particulars of loans given and Investments made 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 provided Corporate guarantee(s) for Rs 40 crores to the Yes Bank Ltd. and Rs 20 crores to the Citi Bank N.A. against the Term Loans for setting up the Mega Food Park by its wholly owned subsidiary M/s Sukhjit Mega Food Park & Infra Ltd. The balance under these term loans appeared at Rs 34 Cr. due to the Yes Bank Ltd. & Rs 7 Cr. to the Citi Bank N.A. as on 31.03.2021 and there is no third party Guarantee / security given / provided by the Company.


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


The necessary details are annexed herewith as 'Annexure F' to this report.


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 2020-21 :

(a) Rs 9,95,825/- as unpaid/undaimed dividend for FY 2012-13 to the Investor Education and Protection Fund (IEPF).

(b) 42,129 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 VSAP & Associates, Chartered Accountants, the retiring Auditors of the Company have confirmed their eligibility to be re-appointed as Statutory Auditors of the Company and will continue till the conclusion of the next Annual General Meeting (as per their original appointment for a period of 5 years, approved in the Annual General Meeting held on 27th July, 2017). The Company has paid a sum of Rs 5.90 lacs (ind. GST) to M/s VSAP & Associates, Chartered Accountants as audit fees during the Financial Year ended 31st March, 2021.

The Auditors' report 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 2021-22, subject to the approval of the Central Government. The Cost Audit Report for the financial year ended 31st March 2021 is due to be filed with the Ministry of Corporate affairs on or before the September, 2021 and the cost audit report for the financial year ended 31/03/2020 was duly filed within the dates extended by MCA as a Covid relaxation.

Secretarial Auditors:

M/s Dinesh Gupta & Co., Practicing Company Secretaries, have conducted Secretarial Audit for the financial year 2020-21. The Secretarial Audit Report for the financial year ended March 31, 2021 forms a part of the Anuual Report as per 'Annexure G'. The Board has re-appointed M/s Dinesh Gupta & Co., Practicing Company Secretaries, as Secretarial Auditors for the financial year 2021-22. The Secretarial Audit report does not contain any qualification, reservation or adverse remark.


Your Directors would like to express their sincere thanks for the assistance and co-operation received from the bankers, govt, authorities, customers, members and other business associates. They place on record their deep sense of appreciation for the committed services of the executives, staff and workers of the Company for its success. Further, the management truly admires & recognizes the dedication, regularity and hard work of the employees during the challenging times amid Covid-19 pandemic.

The Directors regret the loss of life due to Covid-19 pandemic and feel grateful to every front line person who risked their life and safety to fight this pandemic.

Yours truly.

For and on behalf of the Board,

Sd/- Sd/-
Chairperson Managing Director
Dated : 31st May, 2021