Sunil Agro Foods Ltd

To

The Members

Sunil Agro Foods Limited Bangalore

Your Board of Directors has pleasure in presenting the Thirty Seventh (37th) Annual Report together with the Audited Financial Statements for the financial year ended 31st March, 2025 together with the Independent Auditor's Report.

1. FINANCIAL RESULTS: (Rs. in Lakhs)

2. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK:

During the financial year, the Company navigated a challenging environment marked by price volatility and policy constraints, particularly affecting wheat procurement and receivables. Despite these headwinds, the Company reported stable factory operations, expanded its production capacity, and grew its customer base, including new institutional clients and retail market penetration.

Strategic shifts such as the emphasis on consumer-pack sales, hiring in key markets, and risk management through forward contracts helped mitigate adverse impacts, resulting in a significant increase in sales of Maida and bakery specialty products. The Company also progressed on its modernization and expansion plans, while maintaining prudent financial and credit practices.

Although pro tability was affected by rising input costs, higher interest, and depreciation charges, management remains optimistic. Ongoing efforts, including a potential joint venture for the White eld property and likely solution to the long pending recovery from Maiyas Beverage and Foods Pvt. Ltd., reflect a forward-looking approach aimed at long-term growth. The Company remains committed to operational efficiency, strategic growth, and navigating market uncertainties with resilience.

3. CORPORATE GOVERNANCE:

Pursuant to the provisions of Regulation 15(2) of SEBI (LODR) Regulations, 2015, Compliance with Corporate Governance provisions as specified in the Regulations 17 to 27 and clause (b) to (i) of Regulation 46(2) and Para C, D and E of Schedule V shall not apply to listed entities having Paid-up Equity Share Capital not exceeding Rs.10 Crores and Net Worth not exceeding Rs. 25 Crores as on the last date of previous financial year.

The Company falling under the specified limits of the above Regulation, requirement of giving Corporate Governance Report in Annual Report as per the Para C of the Schedule V is exempted to the Company and hence not required to be prepared.

4. MANAGEMENT DISCUSSION AND ANALYSIS: a. Industry outlook and developments:

The Shareholders are aware that the food processing industry in India is large and is growing exponentially. Being in high growth sector, the opportunities for development of this business are very high. The Government of India has been instrumental in the growth and development of the food processing industry. The Government through the Ministry of Food Processing Industries (MoFPI) is infusing all efforts to encourage investments in the business. This sector is among the few that serves as a vital link between the agriculture and industrial segments of the economy. A thrust to the food processing sector implies significant development of the agriculture sector and ensures value addition to it.

b. Business Overview:

The Company has achieved a turnover of Rs. 23,096.14 Lakhs (previous year Rs. 22,904.85 Lakhs) for the financial year ended 31.03.2025 with a net loss of Rs. -109.43 Lakhs (previous year Pro t Rs. 87.58 Lakhs).

c. Opportunities: Your Company's production capacity increased from 250 tonnes to 400 tonnes per day thereby resulting in increase in productivity, quality and acceptance in the market. There is bulk

supply of whole wheat our in silos in tankers to various suppliers.

d. Outlook: Your Company will take all steps to improve the business and enhance the value add to all the stakeholders

e. Internal Control System:

The Company has an effective control system to commensurate with its operations. The Company has internal audit system through outside agency with qualified Chartered Accountant, carries out the audit based on a planned program. The audit also reviews the adequacy and effectiveness of the internal control system and the follow up action taken pursuant to audit observation.

f. Human Resource Development:

The Company conducts regular training programs both internally and externally for Employees at all levels to improve the skills and overall development. Employees' relations at all the levels continue to remain cordial.

5. MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments which occurred, affecting the financial position of the

Company between 31st March, 2024 and the date on which this report has been signed.

6. CHANGE IN THE NATURE OF BUSINESS:

There were no changes in the nature of business during the year under review as prescribed in Rule 8

(ii) of the Companies (Accounts) Rules, 2014.

7. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There are no material changes after 31st March, 2025 till the signing of this Report.

8. DIVIDEND:

Your Directors regret inability to recommend any dividend for the year under review.

9. AMOUNT TRANSFERRED TO RESERVES:

During the financial year the Company has not transferred any amount to the Reserves.

The Authorized Equity Share Capital of the Company as on 31st March, 2025 was Rs. 3,50,00,000 (Rupees Three Crores Fifty Lakhs Only) divided into 35,00,000 (Thirty Five Lakhs) Equity Shares of Rs. 10 (Rupees Ten Only) each.

The Paid up Equity Share Capital of the Company as on 31st March, 2025 was Rs. 3,00,29,000 /- (Rupees Three Crores Twenty Nine Thousand Only) divided into 30,02,900 (Thirty Lakhs Two Thousand Nine Hundred) Equity Shares of Rs. 10 /- (Rupees Ten Only) each.

During the financial year under review, the Company has not issued shares with differential voting

rights nor granted Stock Options nor Sweat Equity.

Capital Investments during the Financial year 2024-25 was at Rs. 29.23 Lakhs (Net of capital work-in-

progress and capital advances).

Since the Company does not meet the criteria for the applicability of Section 135 of the Companies Act

read with the Companies (Accounts) Rules, 2015, this clause is not applicable.

The Company has formulated a Risk Management Policy and a mechanism to inform the Board about risk assessment and mitigation procedures. The Company also undertakes periodical review to ensure that executive management controls risks by means of a properly designed framework.

The Company has a Whistle Blower Policy for vigil mechanism pursuant to the provisions of Sections 177(9) and (10) of the Companies Act, 2013 and as per Regulation 4(2)(d)(iv) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 which is available on website of the Company at http://sunilagro.in/wp-content/uploads/2019/08/whistle-blower-policy.pdf and there were no cases reported during last year.

The Company does not have any Subsidiary, Joint Venture or Associate Company.

The Company continued to maintain high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of its assets. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid-down systems and policies are comprehensively and frequently monitored by your Company's management at all levels of the organization. The Audit Committee, which meets at-least four times a year, actively reviews internal control systems as well as financial disclosures with adequate participation, inputs from the Statutory, Internal and Corporate Secretarial Auditors

As required pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, Annual Return in MGT-7 is placed on the website of the Company i.e., www.sunilagro.in.

Your Company has not invited/accepted/renewed any deposits from the public as defined under the provisions of Companies Act, 2013 and accordingly, there were no deposits which were due for repayment on or before 31st March, 2025.

Opportunities are being looked into for undertaking any commercial activities.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Akshat Jain (DIN: 08424334), Director, retires by rotation at the forthcoming Annual General Meeting and is eligible for re appointment.

The following is the composition of the Board of Directors and Key Managerial Personnel\ as on 31st

March, 2025

Mrs. Chandralika Sharma, resigned from the O ce of Company Secretary on 30.05.2024. Mrs. Shaila A B was appointed as the Company Secretary and Compliance Officer on 01.06.2024. Ms. Manvi Jain and Mr. Nikhil A Murthy have been appointed as Non-Executive Director and Non-Executive Independent Director respectively with effect from 01.04.2024 in the previous Annual General Meeting.

The Board placed on the record its appreciation for the services rendered by outgoing Directors.

The Meetings of the Board are held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. During the period under review Four (4) Board Meetings were held and the maximum time gap between 2 (two) meetings did not exceed one hundred and twenty days. The details of the Board Meetings were held on 24th May, 2024, 12th August, 2024, 13th November, 2024 and 07th February, 2025.

Details of the attendance at Board Meetings and at the AGM held during the year are as follows:

During the year under review, Four Meetings were held 24th May, 2024, 12th August, 2024, 13th November,

2024 and 07th February, 2025.

During the year under review, Two Meetings were held on 24th May, 2024 and 07th February, 2025.

During the year under review, One Meeting was held on 07th February, 2025.

During the year under review, no meetings of nance committee were held.

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI (LODR) Regulations, 2015). (Annexure I).

All the Independent Directors have con rmed that they continue to meet the criteria of independence as prescribed under Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Speci cally, none of them serve as a Non-Independent Director on the board of any other company where a Non-Independent Director of the Company is serving as an Independent Director.

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(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 a airs of the company at the end of the financial year and of the profit and loss of the company for that period;

the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had 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) 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

The industrial relations of the Company have been cordial.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act 2013 for the Financial Year 2024-25 in the prescribed format, AOC 2 is enclosed as Annexure II as a part of this Annual Report.

The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:

However, the Company has made current/non-current investments amounting to 29.23 lakhs/-.

There are no Directors/Employees who were in receipt of the remuneration as prescribed under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration) of Managerial Personnel Rules, 2014 during the year under review and hence annexure required under the said Section is not attached.

The Company's policy relating to appointment of directors, payment of managerial remuneration, directors' quali cations, positive attributes, independence of directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is placed on the website of the Company at https://sunilagro.in/wp-content/uploads/2019/08/nomination-and-remuneration-policy.pdf

The Independent Directors of the Company had met on 07th February, 2025 during the year to review the performance of Non-Independent Directors and the Board as a whole, to review the performance of the Chairman of the Company and Non-Executive Directors and other items as stipulated under the Listing Regulations. The Independent Directors have also declared their independence.

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.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors based on criteria such as Board structure and composition, formation and delegation of responsibilities to Committees, Board processes and their effectiveness, degree of effective communication with the stakeholders.

The performance of the Board Committees was evaluated by the Board after seeking inputs from the Committee members based on criteria such as Committee composition, structure, effectiveness of Committee Meetings.

Independent Directors of the Company provided their views on performance of Non-Independent Directors, and the Board as a whole, considering the views of Executive Directors and Non-Executive Directors.

Your Board has evaluated the Independent Directors and con rms that all Independent Directors fulfilled the independence criteria as specified in SEBI Listing Regulations and their independence from the management.

Messrs G R V & P K, Chartered Accountants, Bangalore (Firm Registration No. 008099S) were appointed, in the Annual General Meeting held on 23rd August, 2022, for a consecutive term of ve years from the conclusion of 34th Annual General Meeting till the Conclusion of 39th Annual General Meeting.

Remuneration Details (2023-24): In Rs.

The Company has not made provisions for Bad debt of Rs. 97.57 lakhs (PY Rs.97.57 lakhs) in case of one debtor Maiyas Beverage and Foods Private Limited which was referred to NCLT under Indian Bankruptcy Code and NCLT has passed the order on 10th May, 2019. As per NCLT order only 15.14% amount is payable to all the Sundry Creditors of Maiyas Beverage and Foods Private Limited. The Company's total outstanding against Maiyas Beverage and Foods Private Limited at the time of referral to NCLT stood at Rs. 114.97 lakhs (PY Rs. 114.97 lakhs). Due to this the Company's loss is understated and Sundry debtors are overstated by Rs. 97.57 lakhs (PY Rs. 97.57 lakhs).

It is understood that certain creditors of Maiyas Beverages and Foods Private Limited have preferred appeals against the order dated 10th May, 2019 of the National Company Law Tribunal, Bangalore Bench before the National Company Law Appellate Tribunal, New Delhi, which have been admitted. Since the aforesaid order has not been implemented, the Company has deemed it t not to make any provisions.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Vijayakrishna KT, Bangalore, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed as Annexure III to this Report.

No Director has received any commission from your Company or from Holding or Subsidiary Company.

The information required pursuant to Section 197 read with Rule 5(1) and (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Details/Disclosures of Ratio of Remuneration to each Director to the median employee's remuneration is annexed as Annexure IV to this report.

Further, the statement showing details in respect of employees of the Company are given in the Annexure IV forming part of the Report.

The Company con rms that it has paid the Annual Listing Fees for the Financial year 2024-25 to BSE Limited where the Company's Shares are listed.

No order was passed by any court or regulator or tribunal during the year under review which impacts going concern status of the Company.

1. Energy Conservation measures taken:

The Company has a system to monitor consumption of energy and all efforts for conservation of energy wherever possible are made and have installed Solar Energy lights in the plant. Energy efficient electric tubes have been installed to save energy. The Company has also installed energy efficient meters controlling waste of power.

2. Additional investments and proposal being implemented for reduction and consumption of energy and the impact of the same in the cost of production of goods.

3. Energy Audit done

Investment was made in machinery designed for low energy consumption and such machinery was in operation in the period under review.

The Company is committed to maintaining its standard and high quality of its production and is constantly engaged in efforts to confer to the guaranteed customer satisfaction.

There were no Foreign Exchange Earnings and Outgo in the Company during the year under review.

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed-o during the financial year 2024-25:

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed Dividends are required to be transferred by the Company to the IEPF, established by the Government of India, after the completion of seven years. Further, according to the Rules, the Shares on which Dividend has not been paid or claimed by the Shareholders for seven consecutive years or more shall also be transferred to the Demat account of the IEPF Authority.

During the year under review there were unclaimed dividend relating to the Financial year 2021-22 which is required to be transferred to IEPF account.

The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013. Further, no case of Fraud has been reported to the Management from any other sources.

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.

Maintenance of Cost Records as specified by the Central Government under Sub-Section (1) of Section 148 of the Companies Act, 2013, is not applicable to the Company.

The Board of Directors has already adopted the Code of Ethics and Business Conduct for the Directors and Senior Management personnel. This code is a comprehensive code applicable to all Directors, Executive as well as Non executive and members of the Senior Management. The Code has been circulated to all the members of the Board and Senior Management Personnel and compliance of the same has been a rmed by them. A declaration given by the Managing Director is attached as Annexure-V of the Board's Report.

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company.

There is no such process initiated during the year, therefore said clause is not applicable to the Company.

As per the Secretarial Standards-4 in case the Company has revised its financial statement or the Report in respect of any of the three preceding financial years either voluntarily or pursuant to the order of a judicial authority, the detailed reasons for such revision shall be disclosed in the Report of the year as well as in the Report of the relevant financial year in which such revision is made.

There is no revision of Financial Statement of the Company took place in any of the three preceding financial years under consideration.

There were no such events took place during the year under consideration.

Your Company has not obtained any rating from the credit rating agency for the securities during the year. Therefore, the said clause is not applicable to the Company.

There are Nil employees who are coming under the requirements of availing the benefits of the Maternity Benefit Act 1961 during the year. However, the Company has made all the arrangements required to be provided to the employees who need the Maternity Benefit Act, 1961.

The Directors place on record their appreciation for valuable contribution made by employees at all levels, active support and encouragement received from the Government of India, Government of Karnataka, Company's Bankers, Customers, Principals, Business Associates and other Acquaintances.

Your Directors recognize the continued support extended by all the Shareholders and gratefully acknowledge with a rm belief that the support and trust will continue in the future also.