Your Directors have pleasure in presenting their report along with the audited accountsof the Company for the year ended 31st March 2017.
The financial results as compared to the previous year are as under:-
| || ||(Rs. in Lakhs) |
| ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|Revenue from operations ||34489 ||38951 |
|Profit before interest financial expenses and depreciation ||3471 ||4874 |
|Interest & financial expenses ||628 ||567 |
|Depreciation and amortization ||729 ||657 |
|Profit before exceptional items and tax ||2114 ||3650 |
|Exceptional items ||- ||- |
|Profit before tax ||2114 ||3650 |
|Tax expense ||527 ||1146 |
|Net profit for the year ||1587 ||2504 |
Dividend Distribution Policy & Dividend
During the year the Board has adopted a Dividend Distribution Policy. This policy isattached as Annexure 1 and can also be accessed on the Company's website athttp://www.dfmfoods. com/download/corporate/dividend-distribution-policy.pdf. YourDirectors have recommended the payment of dividend of H 5/- per equity share of H10/- each for the financial year ended 31st March 2017 amounting to H 6.02crores inclusive of dividend distribution tax of H 1.02 crores. The dividend payment issubject to the approval of members at the ensuing Annual General Meeting. The dividendwill be paid to members whose names would appear on the Register of Members as on 21stJuly 2017.
Transfer to Reserves
During the year under review no amount is proposed to be transferred to GeneralReserves.
Operational Review and the State of Company's Affairs
The details on operational review and the state of Company's affairs are provided inthe Management's Discussion and Analysis Report forming part of this Annual Report.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the corporate governance requirements set out by SEBI. The Report on
Corporate Governance as stipulated under the SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015 forms an integral part ofthis Report. The requisite certificate from the auditors of the Company confirmingcompliance is attached to the Report on Corporate Governance.
Business Responsibility Report
Business Responsibility Report for the year under review as stipulated underRegulation 34(2)(f) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015 is attached as Annexure 2.
Directors and Key Managerial Personnel
Mr. Rohan Jain retires by rotation at the forthcoming Annual General Meeting and beingeligible offers himself for reappointment. His brief resume and other details are providedin the Report on Corporate Governance.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of Independence as prescribed both under theCompanies Act 2013 and the SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015.
Policy on Directors appointment and Policy on Remuneration
The policy on appointment of Board members including criteria for determiningqualifications positive attributes and independence of a Director and the policy onremuneration of Directors KMP and other employees is attached as Annexure 3.
The details of familiarization programmes to Independent Directors with the Company areput up on the website of the Company at the weblink http://www.dfmfoods.com/download/corporate/familiarization-programme-for-Independent-Directors.pdf.
Performance Evaluation of the Board its Committees and Individual Directors
The Company has devised a formal process for the annual evaluation of the performanceof its Board its Committees and Individual Directors including Independent Directors.
A structured questionnaire covering various aspects of the functioning of the Board andits Committees as well as for evaluating the individual Directors performance is in place.Further the Independent Directors had also met separately and evaluated the performanceof the Non-Independent Directors Board and the performance of the Chairman of theCompany. The NRC Committee too has carried out an evaluation of every Directorsperformance.
Particulars of Remuneration of Directors / KMP / Employees
There has been no change in the Key Managerial Personnel of the Company during theyear. The particulars of remuneration under Section 197(12) of the Companies Act 2013 andRule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are attached as Annexure 3A and Annexure 3B.
Employees Stock Option Scheme
Out of the 100000 options granted 20000 options were vested to 1 employee duringthe year.
The Company has received a certificate from the Auditors of the Company that the Schemehas been implemented in accordance with the SEBI Guidelines and the resolution passed bythe members. The certificate would be placed at the Annual General Meeting for inspectionby members.
During the year there has been no change in the DFM Foods Employees Stock Option Plan 2014 of the Company. Further it is confirmed that the ESOP Scheme of the Companyis in compliance with SEBI (Share Based Employee Benefits) Regulations 2014.
The applicable disclosures as stipulated under the SEBI Guidelines as on 31stMarch 2017 with regard to the DFM Foods Employee Stock Option Plan 2014 of theCompany are available on the website of the Company at www.dfmfoods. com and web link forthe same is http://www.dfmfoods.com/ download/corporate/ESOP.pdf.
Meetings of the Board
Four Board meetings were held during the year. For further details please refer to theReport on Corporate Governance which forms part of this Annual Report.
Directors Responsibility Statement
Your Directors state: a) That in the preparation of the annual accounts for the yearended 31st March 2017 the applicable accounting standards have been followedand there are no material departures from the same; b) That the Directors have selectedsuch accounting policies and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at 31st March 2017 and of the profit of the Company for theyear ended on that date; c) That the Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d) That the Directors have prepared the annualaccounts on a going concern basis; e) The Directors have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and are operating effectively; and f) The Directors have devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems areadequate and operating effectively.
Auditors and Auditors' Report
M/s. Deloitte Haskins & Sells (Firm Registration No.015125N) CharteredAccountants had been appointed as statutory auditors of the Company for a period of 4consecutive years from the conclusion of the Annual General Meeting held on 31stJuly 2014 subject to ratification of their reappointment at every Annual GeneralMeeting. The Auditors' Report on the financial statement of the Company for the year formspart of the Annual Report. There has been no qualification reservation adverse remark ordisclaimer by the Auditors in their Audit Report.
The Board had appointed Mrs. Sunita Mathur Practicing Company Secretary to conductthe Secretarial Audit for the Financial Year 2016-17. The Secretarial Audit Report isannexed as Annexure 4. The Secretarial Audit Report does not contain anyqualification reservation adverse remark or disclaimer.
Internal Financial Control System
The Directors have laid down internal financial controls to be followed by the Companyfor ensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and the completeness of the accounting records and the timelypreparation of reliable financial information. The Audit Committee evaluates the internalfinancial control system periodically and no reportable material weaknesses in the designor operation were observed during the year.
Your Directors continually evaluate the risks faced by the Company which could affectits business operations or threaten its existence. The Company takes appropriate riskcontainment measures and manages the same on an ongoing basis.
Subsidiaries Joint Ventures and Associate Companies
The Company does not have any subsidiary Joint Ventures or Associate Company.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to energy conservation technology absorption foreignexchange earnings and outgo are provided in Annexure 5 to this Report.
Corporate Social Responsibility (CSR)
The Company has adopted a CSR Policy which can be accessed at the following web linkhttp://www.dfmfoods.com/download/ corporate/CSR-Policy.pdf.
The Company has spent above 2% of the average net profits of the Company during thethree immediately preceding financial years. The details are provided in the Annual Reporton CSR activities attached as Annexure 6.
Change in Capital Structure and Listing of Shares
There has been no change in the capital structure of the Company. The Company's shareswere listed on the National
Stock Exchange of India Ltd. (NSE) during the year and admitted for trading with effectfrom 29th December 2016. The Company's shares are also listed on theBSE Ltd.
Extract of Annual Return
The extract of Annual Return of the Company is provided in Annexure 7 to thisReport.
Particulars of loans and guarantees given securities provided and investments made
The Company has neither given any loans or guarantees nor provided any securitiescovered under the provisions of Section 186 of the Companies Act 2013.
Loan from Director
During the year under review the Company had borrowed a loan from a Director which wasrepaid during the year. Your Directors draw attention of the members to Note 36 to thefinancial statements which sets out the detail of the aforesaid loan.
Contracts and Agreements with Related Parties
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the normal course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. Prior omnibus approvalis obtained for related party transactions which are of repetitive nature and entered inthe ordinary course of business and at arm's length. All related party transactions areplaced before the Audit Committee for review and approval. The policy on materiality ofrelated party transactions and dealing with related party transactions as approved by theBoard may be accessed on the Company's website at the link http://www.dfmfoods.com/download/corporate/policy-on-related-party-transactions-and-materiality-of-related-party-transactions.pdf.
Your Directors draw attention of the members to Note 32 to the financial statementswhich sets out related party disclosures.
The Audit Committee comprises of Independent Directors namely Mr. Pradeep Dinodia asChairman Mr. Mohit Satyanand Mr. Sarat Chandra Nanda and Ms. Hiroo Mirchandani asmembers.
During the year under review your Company has not accepted any public deposits underChapter V of the Companies Act 2013.
The Company promotes ethical behaviour in all its business activities and has put inplace a mechanism for reporting illegal or unethical behaviour. The Company has a VigilMechanism and Whistle Blower Policy under which the employees are free to reportviolations of applicable laws and regulations and the Code of Conduct. Employees may alsoreport to the Chairman of the Audit Committee.
Your Directors state that during the year under review there were no cases filedpursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Significant and Material Orders passed by the Regulators / Courts / Tribunals
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
Your Directors would like to place on record their sincere gratitude for the assistanceand cooperation received from all the banks. They also wish to place on record theirappreciation for the loyal and devoted services rendered by all categories of employees.
On behalf of the Board
|Place: New Delhi ||Mohit Jain |
|Date: 25th May 2017 ||Chairman |
ANNEXURE - 1 TO DIRECTORS' REPORT
Dividend Distribution Policy
The Board of Directors of DFM Foods Ltd has adopted the
Dividend Distribution Policy of the Company in compliance with Regulation 43A ofSecurities and Exchange Board of
India (Listing Obligations and Disclosure Requirements)
The purpose of the Policy is to endeavor to strike a balance between the quantum ofdividend distributed/declared and amount of profits retained in the business for variouspurposes.
The dividend distribution policy includes the following parameters as mentioned below:-a. Circumstances under which the shareholders may or may not expect dividend
The Board of Directors shall consider the factors provided in this Policy beforedetermination of dividend payout.
The shareholders may not expect a dividend in the case of losses or inadequate profits.b. Parameters / factors to be considered while declaring dividend
The Board shall consider the following factors in deciding the declaration ofdividend:- i) The profits for the year ii) The debt servicing requirements and liquidityratios iii) The dividend payouts of the past iv) Planned capital expenditure program v)Working capital requirements vi) Regulatory framework including tax regulations c.Utilisation of retained earnings
The retained earnings will be utilized for the following:-
- Capital expenditure
- Debt servicing
- Improving the financial liquidity d. Parameters adopted for declaration of dividendwith regard to various classes of shares
At present the issued and paid-up share capital of the Company comprises of onlyEquity Shares. As and when the Company issues other kind of shares the Board and/or anyCommittee(s) may suitably amend this Policy.
4. Review of the policy
This policy shall be subject to review by the Board as may be deemed necessary and inaccordance with any regulatory amendments.
5. Dissemination of policy
This Policy shall be hosted on the Company's website: www.dfmfoods.com.