Your Directors hereby present their Annual Report, together with the
audited accounts of the Company for the financial year ended March 31, 2024.
1. PERFORMANCE OF THE COMPANY
1.1 Results
Your Company's performance for the year ended March 31, 2024 is as
follows: (Millions)
| Particulars |
2023-24 |
2022-23 |
| Net Sales |
7,566.39 |
8,467.42 |
| Other Income* |
34.42 |
22.62 |
| Total Income |
7,600.81 |
8,490.04 |
| Operating Expenses |
7,262.79 |
8,042.22 |
| PBDIT |
338.02 |
447.82 |
| Depreciation |
205.23 |
212.31 |
| Interest |
28.76 |
31.80 |
| Profit before Tax & exceptional item |
104.03 |
203.71 |
| Exceptional item |
26.81 |
- |
| Profit Before Tax (PBT) |
130.84 |
203.71 |
| Taxes |
34.42 |
53.91 |
| Profit After Tax (PAT) |
96.42 |
149.80 |
| Other Comprehensive income # |
(1.94) |
(24.24) |
| Total Comprehensive income |
94.48 |
125.56 |
*Includes other operating revenue
# Net of taxes
The Strategic Foods business closed the year with revenues of 447
crore which were 2% higher than FY'23. Overall Revenues were however impacted by the
lowering of edible oil prices relative to Prior Year, impacted by commodity price
movements. While your Company was able to largely mitigate the impact of commodity price
changes on Gross Margin, higher investments in Advertising & Promotion and increase in
travel costs impacted PBT relative to Prior Year.
1.2 Key Indicators
With a 17 years Revenue CAGR in the Foods business of 17% Your Company
is on track to be amongst India's Best Performing Most Respected Food Companies.
FY'24 Gross Margin was lower than PY by 1Crore with a decrease
in Foods' GM by 70 Lakhs and Staples' GM by 30 Lakhs.
2. DIVIDEND
Given the continued strong cash flow of the Company relative to the
limited on going Capital Expenditure of the Company, your Directors are pleased to
recommend a Dividend of 3/- per equity share of the face value of 10/- each for the year
ended March 31, 2024 subject to the approval of the shareholders at the Annual General
Meeting to be held on September 30, 2024.
STATEMENT OF RETAINED EARNINGS (Millions)
| Particulars |
2023-24 |
2022-23 |
| a) |
At the beginning of the year |
3,650.89 |
3,596.78 |
| b) |
Add: Profit for the year |
96.42 |
149.80 |
| c) |
Add: Other Comprehensive
Income (net of tax) |
(1.94) |
(24.24) |
| d) |
Less: Dividends* |
72.60 |
71.45 |
| e) |
At the end of the year |
3,672.77 |
3,650.89 |
* Dividend given to Agro Tech ESOP Trust excluded of
0.51 mm (Previous year 1.66 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 (atfoods.com)
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 statement of 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. DIVESTITURE BY PROMOTER GROUP
The promoter of the Company i.e. CAG-Tech (Mauritius) Limited, along
with its holding company, Conagra Europe B.V. have entered into a Share Subscription
Agreement dated February 29, 2024 (SSA) with Zest Holding Investments Limited
("Investor"), whereby the Investor shall acquire 100% control over the Promoter
Company and consummation of this transaction would result in the Investor acquiring
indirect control over the Company ("Proposed Transaction"). The Company has
received the Detailed Public Statement on March 7, 2024 in this regard. The Board and
Management of the Company would strive to navigate through the challenges of this move on
the business and the employees of the Company to ensure as normal a running of the
business as possible.
The Proposed Transaction has attracted an obligation on the Investor to
make an open offer to the Public Shareholder of the Company as required under Regulation
3(1), 4 and 5 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,
2011. Accordingly, Letter of Offer (the "LOF") in relation to the Open Offer has
been dispatched to the Eligible Public Shareholders of the Company by Zest Holding
Investments Limited along with Zest Investments Limited ("PAC 1"), Samara
Capital Partners Fund III Limited ("PAC 2"), Infinity Holdings ("PAC
3") and Infinity Holdings Sidecar I ("PAC 4") collectively referred to as
the persons acting in concerts with the acquirer.
The date of Opening of Offer is Thursday, July 11, 2024 and date of
Closing of Offer would be Thursday, July 25, 2024.
The Company has submitted the written recommendation of the Independent
Directors Committee on the open Offer to the Eligible Public Shareholders of the Company
pursuant to Regulation 26(6) of the SEBI ("SEBI (SAST) Regulations") to SEBI,
Stock Exchanges and the Manager to the Offer and also published the same in newspapers.
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
The FMCG sector continues to remain an exciting sector with continued
growth potential driven by India's economic growth. Key to securing a profitable
slice of this pie is having a diverse portfolio of products which will enable your Company
to deliver steady and sustainable growth through a range of market appropriate offerings
produced in a cost-effective manner at the Company's in-house manufacturing
capabilities.
Because of the attractive nature of the Indian Foods market it
continues to attract capital both through public and private markets. However, the
combination of your Company's in-house manufacturing capabilities and a powerful
distribution network covering 485,000 stores across India ensures that your Company is
well positioned to both defend its turf and drive aggressive consumer acquisition driven
by identifying and meeting unmet consumer needs 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 Director's 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'24 the Foods business contributed to 59% of Sales and
56% of Gross Margin.
9. STATE OF THE COMPANY'S AFFAIRS
Your Company has registered a consistent growth of 17% (CAGR) in the
Foods business over the last 17 years through selective entry into fast growing
categories. Key to this continued growth is expansion of distribution and investment in
advertising spends. The Company was successfully able to further expand retail coverage in
FY'24 ending the year with c 485,000 stores in coverage. Brand franchise investments
were also enhanced in FY'24 by c 4 crore with total A&P increasing to c 29
crore. The expansion of coverage together with steady brand franchise investments sets
your Company in a good place for a steady and sustained growth in the strategic Foods
business.
10. PRODUCT CATEGORIES
10.1 Ready to Cook Snacks:
Revenues from the Ready to Cook Snacks business were lower by 1% in
FY'24. This reflected the positive impact of a 2% growth in Volume which was more
than offset by lower price realization relative to PY as the Company responded to lower
edible oils input prices with a lowering of price to the consumer. The lower pricing is
now coming into the base and going forward the Company expects to see steady Volume and
Value growth with Instant Popcorn already at a c 3% Volume Growth.
10.2 Ready to Eat Snacks:
Revenues from the RTE Snacks business were higher than PY by 20% driven
by a 22% growth in Volumes. The Company saw significant success in the RTE Popcorn
business (up 34% vs PY) and is now in a strong national leadership position in this
Category. Going forward your Company will seek to leverage the learnings from RTE Popcorn
in other RTE Snacks to help increase scale while using sweet products in the portfolio to
enhance profitability.
10.3 Spreads & Dips:
Revenues from the Spreads business were lower by 7% vs PY driven by a
3% lower Volumes and as well some impact of pricing. In line with the declared strategy
the Company has introduced both On The Go Packs of Peanut Butter & Biscuit Sticks and
Low Unit Packs of Peanut Butter. The Company expects these introductions to significantly
aid the expansion of Peanut Butter distribution and in doing so allow the Management to
improve both the Volume performance and the price value realization from the entire
category. Improvement in Value realization will be further aided by Chocolate Spreads
where the Company has introduced more affordable offerings to further drive category trial
and consumer acquisition.
10.4 Breakfast Cereals:
A steady expansion of distribution enabled the Company to grow
Breakfast Cereals revenues by 23% in FY'24 with a Volume Growth of 16% and positive
impact of pricing actions. In FY'24 the Company also introduced a coffee variant in
Center Filled Cereals and completed the Granola & Muesli offering with the
introduction of a Muesli variant. A distributed supply chain supported by plants across
the country places the Company in a strong position to have clear leadership in this
important category in the future.
10.5 Chocolates:
The Company saw a 6% Volume growth with flat revenues in the Chocolate
Confectionery category in FY'24. While the growth levels are below expectations, the
Category saw a steady increase in distribution indicating a strong acceptance of the
Company offerings. The Company is working to enhance the instore display levels of the
Category to further accelerate growth supported as well by one new variant in FY'25.
The Management is also on track to achieve the stated goal of building capacity to support
a 100 crore + Chocolate business and leverage the huge potential of this category.
10.6 Premium Staples:
In line with the stated goals of the Company, the focus remained in
FY'24 on profitability for this category with Gross Margin for the year only
marginally lower than Prior Year despite extreme levels of volatility. The Company was
also successfully able to hold the Volume loss due to protecting margin to 6% helped by
launch of adjacencies such as Plain Oats.
10.7 Mass Edible Oils/Staples:
To help protect Retail Distributors from the impact of lower commodity
prices, the Company increased focus marginally behind this Category in FY'24 (Volume
Growth 12% and Revenue Decline of 10%). However, going forward the Company will continue
to manage this business to help optimize the supply chain.
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. Your Company's unique plant centered innovation model
ensures a robust flow of innovation at the lowest possible cost.
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'24, your Company successfully achieved an Engagement Score of 81%. 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 |
2023-24 |
2022-23 |
%Variance |
| (i) Debtors Turnover Ratio |
11.14 |
11.43 |
-2.53% |
| (ii) Debt Service Coverage Ratio |
7.52 |
8.69 |
-13.42% |
| (iii) Current Ratio |
2.05 |
1.99 |
2.78% |
| (iv) Inventory Turnover Ratio |
3.04 |
3.45 |
-11.72% |
15. RETURN ON NET WORTH
The Return on Net worth as compared to the immediately previous
financial year is as follows:
| Particulars |
2023-24 |
2022-23 |
| (i) Return on Net Worth |
1.96% |
3.08% |
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 1.02
crores or more or were employed for part of the year and were in receipt of remuneration
aggregating 8.50 lakhs per month or more during the financial year ending March 31, 2024
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 firelated_partyfitransactions.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)
Your Company has transferred the required CSR amount of 67,22,000/-
to the Prime Minister's National Relief Fund in the month of March, 2024 which is in
line with regulatory requirements. In addition your Company continues to work with
Anganwadi's as part of the Company's Poshan program designed to address
malnourishment.
As per Companies Act, 2013 as amended by Companies (Amendment), Act,
2017, all Companies having net worth of 500 crore or more, or turnover of 1,000 crore
or more or a net profit of 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, Mr. James Patrick Kinnerk, Mr. Pedro Labayen de Inza and Mr. Trevor John
Foster 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/ CSR-POLICY.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 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 of 447 crore and a proven 17 year CAGR of 17%,
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 37th Annual General Meeting.
Mr. Sachin Gopal has resigned from the Directorship and Managing
Director and CEO of the Company w.e.f. close of business of April 24, 2024.
Based on the recommendation of Nomination and Remuneration Committee,
the Board of Directors has appointed Mr. Alexander Byron Jacobs (DIN : 10597668) as an
Additional Director (Non-executive, Non-Independent) of the Company with effect from April
24, 2024 pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and
Article 130 of the Articles of Association of the Company and subject to the necessary
approval of the Shareholders. Based on the recommendation of Nomination and Remuneration
Committee and pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and
Article 130 of the Articles of Association of the Company, the Board of Directors has
appointed Mr. Asheesh Kumar Sharma, (DIN:10602319) as an Additional Director of the
Company and also as the Managing Director, designated as ‘Executive Director and
Chief Executive Officer' effective April 25, 2024, for a term of 5 years until April
24, 2029 on the terms and conditions subject to the approval of the shareholders, as per
the relevant provisions of the Companies Act, 2013, and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing Regulation").
The shareholders' approval was obtained for (i) the appointment of
Mr. Alexander Byron Jacobs as a Director of the Company, whose period of office shall be
liable to determination by retirement of Directors by rotation and (ii) the appointment of
Mr. Asheesh Kumar Sharma, as Director, Managing Director and CEO effective April 25, 2024,
for a term of 5 years whose period of office shall not be liable to determination by
retirement of Directors by rotation. The said approval was obtained by passing an Ordinary
Resolution and a Special Resolution for item (i) and (ii) above respectively through
Postal Ballot by voting through electronic means only ("remote e-voting") as
Special Business items. The said Resolutions were approved by requisite majority of
shareholder and passed on July 11, 2024. The result of the Postal Ballot was submitted to
BSE and NSE on July 12, 2024 and was also uploaded on the website of the company.
Lt. Gen. D B Singh, Mr. Sanjaya Kulkarni, Mr. Narendra Ambwani, Mr.
Arun Bewoor and Ms. Veena Gidwani were re-appointed as non-executive Independent Directors
by the Shareholders' at the 32nd Annual General Meeting held on July 17, 2019, for
second consecutive term of five (5) years till July 16, 2024, not liable to retire by
rotation.
The second term of appointment of Lt. Gen. D.B. Singh, Mr. Sanjaya
Kulkarni, Mr. Narendra Ambwani, Mr. Arun Bewoor and Ms. Veena Gidwani, non-executive
Independent Directors, expires w.e.f. close of hours of July 16, 2024 and therefore they
retired as the Independent Directors of the Company w.e.f. July 17, 2024.
Based on the recommendation of Nomination and Remuneration Committee,
Mr. Rajesh Jain, Mr. Satish Premanand Rao and Ms. Richa Arora are being appointed as
Non-executive Independent Directors 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 w.e.f. July 17, 2024 Mr. Rajesh Jain, Mr. Satish Premanand Rao and Ms. Richa Arora
hold office up to the date of the ensuing Annual General Meeting. Notice as required under
Section 160 of the Companies Act, 2013 has been received from Members proposing the
appointment of Mr. Rajesh Jain, Mr. Satish Premanand Rao and Ms. Richa Arora as
non-executive Independent Directors of the Company at the ensuing Annual General Meeting.
The brief profiles of Mr. Rajesh Jain, Mr. Satish Premanand Rao and Ms.
Richa Arora are given in the notice of the 37th Annual General Meeting.
Mr. Pedro Labayen de Inza (DIN 09576297) and Mr. Trevor John Foster
(DIN 09669509), vide their letters dated July 16, 2024 has tendered their resignation as
Non-Executive Non-Independent Directors of the Company w.e.f. the close of business hours
of July 16, 2024 due to personal and unavoidable circumstances.
All the Independent Directors of the Company as on March 31, 2024 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
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).
26. MEETINGS OF THE BOARD
The Board of Directors met 5 times during the period April to March in
the year 2023-2024 on the following dates:
1. April 27, 2023
2. July 26, 2023
3. October 19, 2023
4. January 24, 2024
5. March 21, 2024
27. AUDIT COMMITTEE
The Company's Audit Committee as on date of this report comprises
of six 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, Ms. Veena
Gidwani and Mr. Pedro Labayen de Inza 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 1,00,000/
- ( 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 % 2 0
Remuneration%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 management has provided knowledge enhancement sessions to all
directors including independent Directors in the board meetings. The topics covered were
(i) Consumer Engagement in a responsible manner- ATFL'S Social Media Strategy,
consumer connect and Impact (ii) Regulatory changes on BRSR framework including BRSR Core
disclosure and assurance. 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.
Accordingly, the first term of 5 years of appointment of M /s Deloitte Haskins & Sells
LLP, as the Statutory Auditors will come to an end on the conclusion of ensuing 37th
Annual General Meeting as per Section 139 (2)(b).
M/s BSR and Co, Chartered Accountants, are recommended for appointment
as the Statutory Auditors of the Company to hold office from the conclusion of the 37th
Annual General Meeting to the conclusion of the 42nd Annual General Meeting in
place of M /s Deloitte Haskins & Sells LLP. The Company has received a certificate
from M/s BSR and Co, Chartered Accountants to the effect that their appointment, if made,
would be within the limits prescribed under Section 139 of the Companies Act, 2013 and
Companies (Audit and Audit Rules), 2014. The Company has received a certificate from M/s
BSR and Co, Chartered Accountants to the effect that they are not disqualified to be
appointed and to act as Auditors in accordance with the provisions of Section 139 and 141
of the Companies Act, 2013 and Companies (Audit and Audit Rules), 2014.
The Report given by the Auditors M/s Deloitte Haskins
& Sells LLP, Chartered Accountants on the financial statements of
the Company for financial year 2023-24 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 2023-24. 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'24 the number of sales staff on the
rolls of the Company were 423.
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 2023-24 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, 2024 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 AND SUSTAINABILITY REPORT
In terms of amendment to Regulation 34 (2) (f) notified by SEBI (LODR)
(Second Amendment) Regulations, 2021 dated May 05, 2021, SEBI has mandated the new
reporting requirements on ESG parameters called the Business Responsibility and
Sustainability Report (BRSR) as part of the Annual Report for top 1000 listed entities
based on market capitalization. In compliance with the same, the BRSR for FY 2023-24 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 541,932/-which remained unpaid / unclaimed
dividends pertaining to FY15-16 was transferred to Investor Education and Protection Fund
on September 14, 2023. i. During the year, the Company has transferred 17,090 unclaimed
shares to IEPF account on September 29, 2023. 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 540,444/- (as on March 31, 2024) of unpaid/unclaimed dividends
pertaining to FY16-17 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
| Asheesh Kumar Sharma |
Lt. Gen. D.B. Singh |
| Managing Director & CEO |
Director |
| DIN 10602319 |
DIN 00239637 |
| Place : Mumbai |
|
| Date : July 16 , 2024 |
|
|