Your Board of Directors (Board) is pleased to presentthe 24thAnnual Report of your Company NHC Foods Limited } for the year ended March 31 2016(the year under review the year or FY16).
In line with the requirements of the Companies Act 2013 ('the Act') and the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ('the SEBI Regulations') this report covers the financial results and otherdevelopments during the financial year April 12015 to March 31 2016 in respect of NHCFoods.
| || ||(Rs In Lacs) |
| ||March 31 2016 ||March 31 2015 |
|Total Revenues ||15339.71 ||14819.81 |
|Total Expenditure ||15291.95 ||14677.33 |
|Profit Before Tax ||47.76 ||142.48 |
|Current Tax ||9.37 ||29.10 |
|Less: MAT Receivable ||4.99 ||9.81 |
|Less: Tax Paid/adjustment of earlier years ||0.47 ||1.57 |
|Less: Deferred Tax ||12.32 ||3.37 |
|Profit After Tax ||30.59 ||118.25 |
Transfer to Reserves:
Your Company does not propose to transfer any amount to its Reserves out of the profitsof the Company for the year ended March 31 2016.
CONVERSION OF UNSECURED LOAN INTO EQUITY AND RECLASSIFICATION OF AUTHORISED SHARECAPITAL OF THE COMPANY:
During the year paid up capital of the Company increased from 11293535 EquityShares to 11855000 due to Preferential Allotment of 561465 Equity Shares Rs. 10/-each Fully paid up on conversion of outstanding unsecured loan to Mr. Apoorva ShahPromoter of the Company on preferential basis.
To facilitate the aforesaid conversion of loan into equity your Company re-classifieditsAuthorised Share Capital from Rs. 240000000/- (Rupees Twenty Four Crores only)divided into 18500000 (One Crore Eighty Five Lacs) Equity Shares of Rs. 10/- (RupeesTen) each and 55.00. 000 (Fifty Five Lacs) Preference Shares of Rs.10/ - (Rupees Ten) eachbe and is hereby reclassified into 2.40.00. 000 (Two Crores Forty Lacs) Equity Shares ofRs. 10/- (Rupees Ten) each which led to consequential alteration in Clause V of theMemorandum of Association of your Company.
In order to conserve the resources for the future expansion plan of the Company underimplementation your directors do not recommend any dividend for the year under thereview.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since there was no Dividend declared and paid last year the provisions of Section 125of the CompaniesAct 2013 does not apply.
STATEMENT OF COMPANY'S AFFAIRS / PERFORMANCE OVERVIEW:
ThehighlightsoftheCompany's Performance are as under:
Revenue increased by 3.51% (From Rs. 14819.81 Lacs to Rs. 15339.71 Lacs)
Due to adverse market situation Profit After Tax decreased from Rs. 118.25 Lacsto Rs. 30.59 Lacs
NHC Foods the domestic business achieved turnover of Rs. 555357388 in FY16and the export achieved turnover of Rs. 971701843.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis forms a part of this annual report and is annexed tothis report.
Update on Macro Economy
Overview of the Industry
Risk Management & Governance
Internal Control System & their Adequacy
Financial Performance & Analysis
Human Resource Strategy
The Company does not have any Subsidiary Company
Transactions with related parties:
None of the transactions with related parties falls under the scope of Section 188(1)of the Act. Information on transactions with related parties pursuant to Section 134(3)(h)of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014 are given inAnnexure 1 - Form AOC-2 and the same forms part of this report.
During the year under review your Board updated the policy on Related PartyTransactions as required under the SEBI Regulations. The policy is uploaded on theCompany's website and can be accessed using the linkhttp://www.nhcgroup.com/corporate-governance-2/
During the financial year under review the Company did not accept any deposit coveredunder Chapter V of the Companies Act 2013
Loans Guarantees or Investments:
There were no Loans Guarantees and Investments covered under Section 186 of theCompaniesAct 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors to the best oftheir knowledge hereby state and confirm that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 internal financial controls to be followed by the Company were laid down andsuch internal financial controls were adequate and were operating effectively; and
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Details of Directors or KMPs appointment or resignation during the year:
During the year Mr. Hemant Topiwala (DIN: 00355690) was appointed as an additionalIndependent Director of the Company effective from 07th Oct 2015 and who shallhold office upto the date of ensuing Annual General Meeting. Thereafter subject to themember's approval he will be appointed for a term of 5 years commencing from the date ofBoard's appointment and not liable to retire by rotation.
II. Resignation :
During the year Mr. Aashish Vyas (DIN: 00929820) has resigned from the position ofIndependent Director effective from 07th Oct 2015
III. RE-APPOINTMENT OF MR. APOORVA SHAH CHAIRMAN & MANAGING DIRECTOR (DIN:00573184) FOR A PERIOD OF THREE YEARS W.E.F. 13TH NOVEMBER 2015 TO 12TH NOVEMBER 2018:
Members approved the appointment of Mr. Apoorva Shah as Chairman & ManagingDirector (DIN: 00573184) for a period of three years w.e.f. 13th November 2015 to 12thNovember 2018 through postal ballot held on Friday 29th January 2016.
IV. RE-APPOINTMENT OF MRS. ALPA SHAH (DIN: 00573190) WHOLE - TIME DIRECTOR FOR APERIOD OF THREE YEARS W.E.F. 14TH FEBRUARY 2016 TO 13TH FEBRUARY 2019:
Members approved the appointment of Mrs. Alpa Shah (DIN: 00573190) Whole - TimeDirector for a period of Three years w.e.f. 14th February 2016 to 13thFebruary 2019 through postal ballot held on Friday 29th January 2016.
Declaration by Independent Directors:
The Company has received the necessary declaration from each Independent Director inaccordance with
Section 149(7) of the Companies Act 2013 that he met the criteria of independence aslaid out in sub - Section (6) of Section 149 of the Companies Act 2013 and Regulation16(1)(B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Director Retiring by Rotation:
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mrs. Alpa Shah (DIN: 00573190) Director of the Companyretires by rotation at ensuing Annual General Meeting and being eligible offers herselffor reappointment. The Board recommends her reappointment as Director liable to retire byrotation at the ensuing Annual General Meeting.
KEY MANAGERIAL PERSONNEL:
During the year under review there is no change in the Key Managerial Personnel of theCompany. The Key Managerial Personnel of the Company as on date are:
|1. Mr. Apoorva Shah ||Chairman & Managing Director; |
|2. Mrs. Alpa Shah ||Whole - time Director |
|3. Mr. Ashok Kamath ||Chief Financial Officer |
|4. Ms. Suvarnalata Chavan ||Company Secretary & Compliance Officer |
The details of the meetings of the Board of Directors and its Committees held duringthe year under review are stated in the Corporate Governance Report.
The details of attendance of the Directors in the Board Meetings and its Committeesduring the year under review are stated in the Corporate Governance Report.
The composition of the Audit Committee of the Board of Directors along with thecomposition of other Committees is stated in the Corporate Governance Report.
NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES:
In terms of the applicable provisions of the Act read with the Rules made thereunderand the SEBI Regulations your Board has formulated a Policy on appointment removal andremuneration of Directors Key Managerial Personnel and Senior Management Personnel andalso on Board Diversity Succession Planning and Evaluation of Directors. Salient featuresof the said Policy are stated in the Corporate Government Report.
As per the provisions of the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the formal annual evaluation was carried outfor the Board's own performance its committee & Individual directors. The manner anddetails in which evaluation was carried out is stated in the Corporate Governance Reportwhich is annexed and form a part of this report.
Particulars of Employees:
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Companyforthefinancial year:
|Name of the directors ||Ratio to median remuneration |
|Executive Directors || |
|Mr. Apoorva Shah ||36.1 |
|Mrs. Alpa Shah ||36.1 |
|Non - Executive Directors || |
|Mr. Rajiv Bhatt ||NA |
|Mr. Hemant Topiwala ||NA |
b. The percentage increase in remuneration of each director chief financial officerCompany secretary in the financial year:
|Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration in the financial year |
|Mr. Apoorva Shah ||2.01% |
|Mrs. Alpa Shah ||2.01% |
|Mr. Ashok Kamath ||51.25% |
|Ms. Suvarnalata Chavan ||14.59% |
c. The percentage increase in the median remuneration of employees in the financialyear: NIL
d. The number of permanent employees on the rolls of Company: 91
e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: Nil
The statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in a separate annexure forming part of this report.Further the report and the accounts are being sent to the members excluding the aforesaidannexure. In terms of Section 136 of the Act the said annexure is open for inspection atthe Registered Office of the Company. Any shareholder interested in obtaining a copy ofthe same may write to the Company Secretary.
I affirm that Remuneration is as per the remuneration policy of the Company.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company's approach on Corporate Governance has been detailed out in the CorporateGovernance Report. Your Company has deployed the principles enunciated therein to ensureadequacy of internal financial controls with reference to the financial statements. YourBoard has also reviewed the internal processes systems and internal financial controlsand Directors' Responsibility Statement contains confirmation as regards adequacy of theinternal financial controls.
CODE OF CONDUCT:
The Company has laid down and adopted a Code of Conduct for its Directors and SeniorManagement Personnel which is also available on the Company's website: http://www.nhcgroup.com/corporate-governance-2/. The Company has received confirmation from all Directors as well as SeniorManagement Personnel regarding compliance with the Code of Conduct during the year underreview as required under Regulation 26(3) of the Listing Regulations. Additionally allIndependent Directors of the Company shall be bound by duties of Independent Directors asset out in the Companies Act 2013 read with the Schedule and Rules thereunder. Pursuantto Schedule V(D) of the Listing Regulations a declaration signed by the Managing Directorof the Company to this effect is attached at the end of this report.
Vigil Mechanism Policy:
The Board has approved the Whistle Blower Policy a mechanism for employees to reportto the management concerns about unethical behaviour actual or suspected fraud orviolation of the Company's code of conduct. The mechanism also provide for adequatesafeguards against victimization of employees who avail of the mechanism and also providefor direct access to the Chairman of the Audit Committee in exceptional cases. During theyear under review no personnel has been denied access to the audit committee. The Companyhas adopted a formal Vigil Mechanism/ Whistle-blower policy. The approved policy isavailable on the Company's website www.nhcgroup.com
Disclosure under Section 22 of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:
The Company's policy on prevention of sexual harassment of women provides for theprotection of women employees at the workplace and for prevention and redressal of suchcomplaints. There were no complaints pending for the redressal at the beginning of theyear and no complaints received during the financial year.
For your Company Risk Management is an integral and important component of CorporateGovernance. Your Company believes that a robust Risk Management ensures adequate controlsand monitoring mechanisms for a smooth and efficient running of the business. A risk-aware organization is better equipped to maximize the shareholder value.
The key cornerstones of your Company's Risk Management Framework are:
1. Periodic assessment and prioritization of risks that affect the business of yourCompany;
2. Development and deployment of risk mitigation plans to reduce the vulnerability tothe prioritized risks;
3. Focus on both the results and efforts required to mitigate the risks;
4. Defined review and monitoring mechanism wherein the functional teams the topmanagement and the Board review the progress of the mitigation plans;
5. Embedding of the Risk Management processes in significant decisions such as largecapital expenditures mergers acquisitions and corporate restructuring
6. Wherever applicable and feasible defining the risk appetite and install adequateinternal controls to ensure that the limits are adhered to.
Significant and material orders by the regulators or courts or tribunals impacting theCompany's going concern status and operations in future:
During the period under review no significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and Company'soperations in the future.
Pursuant to the provisions of Section 139 of the Act and the rules framed thereafterNGS&Co.LLP Chartered Accountants were appointed as statutory auditors of the Companyfrom the conclusion of this Annual General Meeting until the conclusion of the next AnnualGeneral Meeting of the Company
Section 204 of the Companies Act 2013 read with rules made thereunder inter-aliarequires every listed Company to annex with its Board's report a Secretarial Audit Reportgiven by a Company Secretary in Practice in the Form MR-3.
The Board of Directors has appointed Mr. Dinesh Kumar Deora Practising CompanySecretary as Secretarial Auditor to conduct the Secretarial Audit of the Company for theFinancial Year 2015-16. The report did not contain any qualification reservation oradverse remark. The Board of Directors at its meeting held on 30th May 2016approved the appointment of Mr. Dinesh Kumar Deora Practising Company Secretary asSecretarial Auditor to conduct a Secretarial Audit of the Company for the Financial Year2016- 17. The Secretarial Audit Report of the Company for the Financial Year 2015-16 isannexed to this Report as Annexure 2.
The observations made by Auditors with reference to notes to account are selfexplanatory and need no comments.
Board's response on the remarks made by Statutory Auditors and Secretarial Auditors:
There were no qualifications reservations and adverse remarks made by the statutoryauditors in their Audit Report and by the Company Secretary in practice in theirSecretarial Audit report.
Corporate Governance Report:
The Company is committed to observe good corporate governance practices. The report onCorporate Governance for the financial year ended March 312016 as per regulation 34(3)read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms a part of this Annual Report. The requisite Certificate from theStatutory Auditors of the Company confirming compliance with the conditions of CorporateGovernance is annexed to this Report.
Conservation of energy technology absorption and foreign exchange earnings and outgo:
Theparticularsasprescribed under Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are annexed to this Report asAnnexure 3.
Extract of Annual Return:
An extract of the Annual Return in Form MGT-9 in compliance with Section 92 of theCompanies Act 2013 read with applicable Rules made thereunder is annexed to this Report asAnnexure 4.
Material changes and commitments:
There were no material changes and commitments that occurred subsequent to the end ofthe financial year till the date of this report which affects the financial position ofthe Company.
CHANGE IN NATURE OF BUSINESS:
There has no change in the nature of business of the Company. Your Company continues tobe one of the leading food processing Company.
A diverse Board enables efficient functioning through differences in perspective andskill and also fosters differentiated thought processes at the back of varied industrialand management expertise gender knowledge. The Board recognises the importance of adiverse composition and has adopted a Board Diversity Policy which set out the approach todiversity.
Appointment of Independent Directors:
Pursuant to the provisions of Section 149 of the Companies Act 2013 and Regulation 17of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 asamended from time to time your Company has requisite number of Independent Directors onits Board. Thus the Company has complied with the requirements of the said provisions forappointment of Independent Directors during the year under review.
1. Familiarization Programme for the Independent Directors:
In compliance with the requirements of SEBI Regulations the Company has put in place afamiliarization programme for Independent Directors to familiarize them with their rolesrights and responsibility as Directors working of the Company nature of the industry inwhich the Company operates business model etc. The Company operates business model etc.The same is also available on the website of the Company and can be accessed by web linkhttp:// www.nhcgroup.com/wp-content/uploads/2015/01/ FAMILIARIZATION-PROGRAM-FOR-INDEPENDENT-DIRECTORS-OF-NHC-FOODS- LIMITED.pdf
DEMATERILISATION OF SHARES:
The Company has connectivity with NSDL & CDSL for dematerialization of its equityshares. The ISIN No. INE141C01028 has been allotted for the Company. Therefore investorsmay keep their shareholding in the electronic mode with their Depository Participates.97.91% of the Company's Paid-up Share Capital is in dematerialized form as on 31st March2016 and balance 2.09% is in physical form.
HEALTH SAFETY AND ENVIRONMENT PROTECTION:
The Company has complied with all the applicable environmental law and labour laws. TheCompany has been complying with the relevant laws and has been taking all necessarymeasures to protect the environment and maximize worker protection and safety.
Policy on directors' appointment and remuneration and other details:
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of this report.
LISTING OF SHARES:
The shares of the Company are listed on BSE Ltd.
Subsequent to the notification SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 (Listing Regulations) during the year the Company has entered into"Uniform Listing Agreement" with BSE Ltd.
The Company has regularly paid the Annual Listing fees to the respective StockExchanges. Annual Custody / Issuer fee for the financial year 2016-17 has been paid by theCompany to National Securities Depositories Limited and Central Depository ServicesLimited.
TheBoardplacesonrecord its appreciation for the continued co-operation and supportextended to the Company by customers vendors regulators banks financial institutionsrating agencies stock exchanges and depositories auditors legal advisors consultantsbusiness associates and all the employees with whose help cooperation and hard work theCompany is able to achieve the results.
The Board deeply acknowledges the trust and confidence placed by the consumers of theCompany and all its shareholders.
By the order of the Board of Directors
For NHC FOODS LIMITED
(Company Secretary & Compliance Officer)
Date: 30th May 2016