Your Directors have pleasure in presenting the 32nd Annual Report on the business andoperations of the Company and the Audited financial accounts for the year ended 31stMarch 2017.
H in lacs
| ||2016-17 ||2015-16 |
|Total Revenue ||3807.97 ||2386.48 |
|Profit for the year before Finance charges and depreciation ||397.08 ||226.68 |
|Less: Finance charges ||93.86 ||98.12 |
|Profit before depreciation ||303.22 ||128.56 |
|Less: Depreciation ||136.24 ||133.82 |
|Profit/(Loss) for the year after Finance charges and depreciation / before tax for the year ||166.98 ||(5.26) |
|Less: Provision for Tax - || || |
|Current Tax ||30.00 ||- |
|Deferred Tax Assets ||2.64 ||149.33 |
|Profit for the year after Tax ||134.34 ||144.07 |
The Company did not transfer any amounts to the general reserve during the year.
During the year the Company increased the Authorised Share Capital from H70000000/-to H150000000/- divided into 13000000 Equity Shares of H10/- each and 200000
9% Redeemable Preference Shares of H100/- each. The
Company allotted 7992500 Equity Shares of H10/- each at a premium of H30/- each tothe Promoter and Non-Promoters on a preferential basis. The Issued Subscribed and Paid upCapital stood at H145925000/- as on 31st March 2017 consisting of 129925000 EquityShares of H10/- each and 160000 9% Redeemable Preference Shares of H100/- each.
Year in Retrospect
During the year under review the Company continued the manufacturing of snack foodKurkure for M/s. Pepsico India Holdings Pvt. Ltd. and infant food productsFarex Easum and First Food for M/s. Nutricia IndiaPvt. Ltd. on a monthly basis. The Company also continued to manufacture and market itsexisting brand "Bonny Mix" and "Cnergy" in the local market.
The Company has entered the leather shoes business with the buying of certain moveableassets and stocks in respect of the leather business of Ponds Export Limited a subsidiaryof Hindustan Uniliver Limited.
The Company reported a turnover of H3807.97 lakhs for the year under review ascompared to H2386.49 lakhs during the previous year and a profit after tax of H134.34lakhs for the year under review as compared to H144.07 lakhs during the previous year
Considering the carry forward losses and in order to strengthen the Companysfinancials your Directors do not recommend any dividend for the year under review.
The equity shares of your Company are listed on BSE Limited (BSE)
The listing fees for the year 2017-2018 have been paid to BSE.
The Company continues to enjoy Food Safety System Certification 22000 accreditationmade by SGS United Kingdom Ltd.
The Company has not accepted any public deposits during the year under review.
Directors Responsibility Statement
To the best of our knowledge and belief and based on the information andrepresentations received from the operating management your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:
(a) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with the proper explanation relating to material departures;
(b) that such accounting policies as mentioned in Notes to the annual accounts havebeen selected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of afiairs of theCompany as at 31st March 2017 and of the profit of the Company for the year ended on thatdate;
(c) that proper and suficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) that the annual accounts have been prepared on a going concern basis;
(e) that proper internal financial controls are in place and that the internalfinancial controls are adequate and are operating effectively;
(f) that proper systems to ensure compliance with the provisions of all applicable lawsare in place and that such systems are adequate and operating effectively.
Mrs. Pallavi S. Dempo resigned from the Board with effect from 22nd May 2017. YourDirectors have placed on record their appreciation of the valuable services rendered tothe Company by her during her tenure as an Non-Executive Woman Director of the Company.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Rajesh S. Dempo retires by rotation at the forthcomingAnnual General Meeting being eligible Mr. Rajesh S. Dempo ofiers himself forre-appointment. Your Board has recommended his re-appointment.
The Board at its meeting held on 22nd May 2017 appointed Mr. Sameer R. Kothari (DIN01261343) as an Additional Director Ms. Honey Vazirani (DIN 07508803) as an AdditionalDirector of the Company in the category "Independent Woman Director" andMr. Nikhil K. Vora (DIN 05014606) as an Additional Director of the Company in the category"Non-Executive Director". Mr. Sameer R. Kothari Ms. Honey Vazirani and Mr.Nikhil K. Vora hold ofice up to the date of the ensuing Annual General Meeting but areeligible for reappointment.
The Board of Directors also appointed Mr. Sameer R. Kothari (DIN 01261343) as theManaging Director of the Company for a period of 5 years with effect from 22nd May 2017subject to the approval of the Members at the ensuing Annual General Meeting and alsore-appointed Mr. Ganesh T. Argekar (DIN 06865379) as Whole-time Director of the Companywith designation "Executive Director" for a further period of 3 years witheffect from 19th May 2017 subject to the approval of the Members at the ensuing AnnualGeneral Meeting. Special Resolutions to this effect are included as part of the Noticeconvening the forthcoming Thirty-second Annual General Meeting for the Members approval.
Brief resume of the directors proposed for appointment / reappointment together withother relevant details form part of the Notice of the ensuing Annual General Meeting.
Key Managerial Personnel
Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr. Sameer R.Kothari Managing Director
Mrs. Beena M. Mahambrey Company Secretary and Mr. Kedarnath Swain CFO are the KeyManagerial Personnel of the Company.
Mr. Sameer R. Kothari Managing Director has replaced Mr. Ganesh T. Argekar as the CEO& KMP with effect from 22nd May 2017. Mr. Argekar held the position of KMP of theCompany up to 18th May 2017
Independent Directors Declaration
The Company has received declarations pursuant to Section 149(7) of the Companies Act2013 from the Independent Directors of the Company viz. Mr. Shashi Kumar Kalathil Adv.Sudin M. Usgaonkar and Ms. Honey Vazirani confirming that they meet the criteria ofindependence as prescribed under sub-section (6) of Section 149 of the Companies Act 2013in respect of their position as an "Independent Director" of Hindustan FoodsLimited.
Meetings of the Board of Directors
A minimum of four Board meetings are held annually. Additional Board meetings areconvened by giving appropriate notice to address the Companys specific needs. Incase of business exigencies or urgency of matters resolutions are passed by circulation.
During the year under review seven Board meetings were held the details of which aregiven in the Corporate Governance Report which forms part of this Annual Report.
The intervening gap between two consecutive meetings was within the period prescribedunder the Companies Act 2013 and the Listing Regulations.
The Audit Committee comprises of Mr. Shashi K. Kalathil who serves as the Chairman ofthe Committee and Adv. Sudin M. Usgaonkar Mr. Rajesh S. Dempo and Ms. Honey Vazirani asthe other members. The terms of reference etc. of the Audit Committee is provided inCorporate Governance Report which forms part of this Annual Report.
All the recommendations made by the Audit Committee during the financial year underreview were accepted by the Board.
Nomination and Remuneration Committee
The composition terms of reference etc. of the Nomination and Remuneration Committeeis provided in Corporate Governance Report which forms part of this Annual Report.
The Committee has formulated a Nomination and Remuneration Policy and the same has beenuploaded on the website of the Company at www.hflgoa.com
Pursuant to the provisions of the Companies Act 2013 and regulation 17(10) of theListing Regulations the Board has carried out the annual performance evaluation of itsown performance the Directors individually as well as the evaluation of the working ofits Statutory Committees.
Based on various criteria the performance of the Board various Board CommitteesChairman and Individual Directors (including Independent Directors) was found to besatisfactory.
Internal Control System
The Board has laid down Internal Financial Controls within the meaning of theexplanation to section 134 (5) (e) ("IFC") of the Companies Act 2013. The Boardbelieves the Company has sound IFC commensurate with the nature and size of its business.Business is however dynamic. The Board is seized of the fact that IFC are not static andare in fact a fluid set of tools which evolve over time as the business technology andfraud environment changes in response to competition industry practices legislationregulation and current economic conditions. There will therefore be gaps in the IFC asBusiness evolves. The Company has a process in place to continuously identify such gapsand implement newer and or improved controls wherever the effect of such gaps would have amaterial effect on the Companys operations.
M/s. R. Sundararaman & Co. Chartered Accountants Statutory Auditors of theCompany hold ofice till the conclusion of the ensuing Annual General Meeting (AGM) andtheir term (transition period) of 3 years is expiring at the ensuing AGM.
Accordingly as per the requirements of Section 139(2) of the Companies Act 2013(the Act) M/s. MSKA & Associates Chartered Accountants (Registration No.105047W) are proposed to be appointed as auditors for a period of 5 years commencing fromthe conclusion of 32nd AGM till the conclusion of the 37th AGM subject to ratification byshareholders every year as may be applicable in place of M/s. R. Sundararaman & Co.Chartered Accountants. M/s. MSKA & Associates Chartered Accountants have consentedto the said appointment and confirmed that their appointment if made would be withinthe limits specified under Section 141(3)(g) of the Act. They have further confirmed thatthey are not disqualified to be appointed as statutory auditor in terms of the provisionsof the proviso to Section 139(1) Section 141(2) and Section 141(3) of the Act and theprovisions of the Companies (Audit and Auditors) Rules 2014. The Audit Committee and theBoard of Directors recommend the appointment of M/s. MSKA & Associates CharteredAccountants as statutory auditors of the Company from the conclusion of the 32nd AGM tillthe conclusion of the 37th AGM to the shareholders.
Statutory Auditors Observations
The notes on financial statements referred to in the Auditors Report areself-explanatory and therefore do not call for any further explanations or comments.
There are no qualifications reservations or adverse remarks or disclaimer made in theAuditors Report which requires any clarification or explanation.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rulesthereunder the Board of Directors of the Company has appointed CS Sadashiv V. ShetPracticing Company Secretary to conduct the Secretarial Audit. The Secretarial AuditReport for the financial year ended 31st March 2017 forms a part of this Annual Report.The same is self explanatory and requires no comments.
Vigil Mechanism / Whistle Blower Policy
The Company has established a Vigil Mechanism / Whistleblower Policy for the employeesto report their genuine concerns or grievances and the same has been posted on theCompanys website www.hflgoa.com.
The Audit Committee of the Company oversees the Vigil Mechanism.
The Company follows well-established and detailed risk assessment and minimizationprocedures which are periodically reviewed by the Board. The Company has in place abusiness risk management framework for identifying risks and opportunities that may have abearing on the organizations objectives assessing them in terms of likelihood andmagnitude of impact and determining a response strategy.
The Senior Management assists the Board in its oversight of the Companysmanagement of key risks including strategic and operational risks as well as theguidelines policies and processes for monitoring and mitigating such risks under theaegis of the overall business risk management framework.
Particular so loans guarantees or investments
There were no loans guarantees and investments made by the Company under Section 186of the Companies Act 2013 during the year under review and hence the said provision isnot applicable.
Related Party Transactions
The transactions entered with related parties for the year under review were onarms length basis and in the ordinary course of business and as such provisions ofSection 188 of the Companies Act 2013 are not attracted. Thus disclosure in Form AOC-2 isnot required. Further there were no material related party transactions during the yearunder review with the Promoters Directors or Key Managerial Personnel.
As required under Regulation 23(1) of the Listing Regulations 2015 the Company hasformulated a policy on dealing with Related Party Transactions. The Policy has beenuploaded on the Companys website: www.hflgoa.com
Significant and material orders passed by the Regulators or Courts
There were no significant material orders passed by the Regulators / Courts / Tribunalswhich would impact the going concern status of the Company and its future operations.
Particulars of employees and related disclosures
None of the employees of the Company were in receipt of remuneration exceeding H60 lacsper annum or more throughout the year nor exceeding H5 lakhs per month or more for part ofthe financial year 2016-17.
The information required under Section 197(12) of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and formingpart of the Directors Report for the year ended 31st March 2017 is given in aseparate Annexure to this Report.
The above Annexure is not being sent along with this Report to the Members of theCompany in line with the provisions of Section 136 of the Companies Act 2013. Members whoare interested in obtaining these particulars may write to the Company Secretary at theRegistered Ofice of the Company. The aforesaid Annexure is also available for inspectionby the Members at the Registered Ofice of the Company 21 days before the 32nd AnnualGeneral Meeting and up to the date of the ensuing Annual General Meeting during thebusiness hours on working days.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and outgo
The particulars relating to energy conservation technology absorption foreignexchange earnings and outgo required to be disclosed by Section 134 (3)(m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 areprovided in the Annexure I to this Report.
Corporate Social Responsibility (CSR)
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report as Annexure II and forms an integral part of this Report
Disclosures under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
In accordance with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules made there under theCompany has formulated an internal Policy on Sexual Harassment at Workplace (PreventionProhibition and Redressal).
The policy aims at educating employees on conduct that constitutes sexual harassmentways and means to prevent occurrence of any such incident and the mechanism for dealingwith such incident in the unlikely event of its occurrence.
The ICC is responsible for redressal of complaints related to sexual harassment ofwomen at the workplace in accordance with procedures regulations and guidelines providedin the Policy.
During the year under review there were no complaints referred to the ICC.
It has been the endeav our of your Company to follow and implement best practices incorporate governance in letter and spirit. The following forms part of this AnnualReport:
(i) Declaration regarding compliance of Code of Conduct by Board Members and SeniorManagement Personnel;
(ii) Management Discussion and Analysis;
(iii) Report on Corporate Governance and;
(iv) Practicing Company Secretary Certificate regarding compliance of conditions ofcorporate governance.
Appreciation and Acknowledgement
Your Directors would like to express their appreciation for the assistance andco-operation received from the Government authorities banks customers businessassociates and members during the year under review. Your Directors also wish to place onrecord their deep sense of appreciation for the committed services by the executivesstafi and workers of the Company.
For and on behalf of the Board of Directors
|Sameer R. Kothari ||Ganesh T. Argekar |
|Managing Director ||Executive Director |
|DIN: 01361343 ||DIN: 06865379 |
|Place: Panaji Goa. || |
|Date: 11th August 2017 || |