To the members of Ovobel Foods Limited
Your Directors are pleased to present the 25" (Twenty Fifth) Annual Reportof Ovobel Foods Limited together witli the Audited Statement of Accounts for the yearended 31" March 2017.
1. FINANCIAL RESULTS
The financial results of the Company during the year under review are summarized asunder:
(Rupees In Lakhs)
|Particulars ||For the year ended ||For the year ended |
| ||31.03.2017 ||31.03.2016 |
|Total Income ||8057 ||11512 |
|Total Expenses excluding Finance Cost & Depreciation ||8168 ||10678 |
|Finance Cost & Depreciation ||206 ||217 |
|Total Expenses including Finance Cost & Depreciation ||8374 ||10895 |
|Net Profit (Loss) Before Tax ||(317) ||617 |
|Tax Expenses || || |
|Current Tax / Taxes of earlier year ||50 ||186 |
|Deferred Tax ||10 ||13 |
|Net Profit (Loss) After Tax ||(377) ||418 |
|Earnings Per Share - || || |
|Basic & ||(3.59) ||3.98 |
|Diluted (in Rs.) ||(3.59) ||3.98 |
The entire loss of the company has been transferred to reserves.
2. OPERATIONAL REVIEW:
The highlights of the Company performance are as under:
The Net Sales for the period decreased from 10557 lakhs in the previous year to7535 lakhs.
The Profit/(Loss) Before Tax for the period decreased from 617 Lakhs (previousyear) to (317) Lakhs (Current year).
Profit/(Loss) after tax for the period decreased from 418 Lakhs (previous year)to (377) lakhs (Currentyear).
During the year company has incurred a net loss of Rs. 377 lacs. Your directors areconfident that going forward the Company shall perform well and hence expects to growmulti fold in the years to come.
Your board will take required actions for increasing the revenue and reducing the costof the Company.
3. NATURE OF BUSINESS:
The company operates in the domain of egg powder and frozen egg ' manufacture andexports.
There has been no change in the nature of business of the Company during the year underreview.
The Board regret its inability to recommend any dividend as it is considered prudentconserve the resources for investments in the business.
5. SHARE CAPITAL:
The Authorised Capital and Paid-up Capital of the Company as on March 31 2016 was Rs.110000000/- and Rs. 105008000/- respectively. There has been no change in thecapital structure of the company during the year.
6. SUBSIDIARY COMPANIES:
The Company does not have any subsidiary Company during the period under review.
7. FIXED DEPOSITS:
During the financial year under review the Company did not accept any deposits coveredunder chapter V of the Companies Act 2013 and Section 73 of the Companies Act 2013 and theCompanies (Acceptance of Deposits) Rules 2014.
8. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS:
The Company has invested Rs 3 lakhs in 10000 Equity Instruments of Rs. 10/- each fullypaid in SMIFS Capital Markets Limited (Quoted). (Market value Rs 4.60 lakhs - March 2017).
9. MATERIAL CHANGES AND COMMITMENTS:
There is no material changes and commitments affecting our financial position betweenthe end of the financial year to which this financial statement relates and date of thisreport.
There is no significantand material order by the regulator/ court/tribunals impactingthe going concern status and the Company's operation in future.
10. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company had laid down guidelines pol icies procedures and structure to enableimplementation of appropriate internal financial controls across the Company. Thesecontrol processes enable and ensure the orderly and efficient conductof Company'sbusiness including safeguarding of assets prevention and detection of frauds and errorsthe accuracy and completeness of the accounting records and timely preparation &disclosure of financial statements. Review and control mechanisms are built in to ensurethat such control systems are adequate and operating effectively. To maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board & Managing Director.
11. EXTRACT OFANNUAL 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 I.
12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
Company has adopted a framework and policy for approving relating party arrangements /transactions. Review of Related Party arrangements / transactions is carried by the AuditCommittee at its meetings. Company has framed Related Party Transactions Policy providingthe framework for approval of related party transactions by the Audit Committee and Board.
The details of the Related Party Transactions during the period under review areprovided in Annexure II which forms part of Board Report.
The policy on the Related Parties Transactions has been disclosed on the website of theCompany. Below is the link ofthe website.
13. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Report on Management Discussion and Analysis Report as required under ListingRegulations forms part of this Annual Report and is annexed
to this Report as Annexure III. Certain Statements in the said report may be forwardlooking. Many factors may affect the actual results which could be different from whatthe Directors envisage in terms of the future performance and outlook.
14. CORPORATE GOVERNANCE:
Your Company is committed to observe good Corporate Governance practices. The report onCorporate Governance for the financial year ended March 312017 as per Regulation 34(3)read with Schedule V of theSEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of this Annual Report and is annexed to this Report asAnnexure V. The requisite certificate from Statutory Auditors M/s Narahari &Raghavendra Associates Bangalore confirming Compliance with the conditions of CorporateGovernance is attached to this Report as Annexure IV.
15. SECRETARIAL AUDITOR'S REPORT:
Section 204 of the Companies Act 2013 read with rules made thereunder inter-aliarequires every listed company to annex with its Board report a Secretarial Audit Reportgiven by a Company Secretary in Practice in the Form MR-3.
As per the above-mentioned provisions Secretarial Audit report is hereby annexed asAnnexure VI.
In Secretarial Audit report issued by Mr. Rafeeulla Shariff Practising CompanySecretary for the Financial Year 2016-17 the following observations were made.
a. Earlier the company was declared sick industrial company within the meaning ofsection 3(1 )(o) of Sick Industrial Companies (Special provisions) Act 1985 by BIFR on29th October 2003. Further in its hearing held on 22ndJanuary 2007 Vijaya bank has beenappointed as OA & as per its direction company has submitted its revised proposals toVijaya Bank. The revised & improved OTS offers submitted by the company withffSIIDIare under active Consideration.
The government of India has given effect to the SICA repealment Act with effect from1st December 2016 and consequently BIFR is no longer in existence. Hence has company willbe seeking professional advice on the necessity/ statutory compulsions if any to make afresh reference to National Company Law Tribunal (NCLT) under the provisions of the"Insolvency and Bankruptcy Code 2016" as provided for under SICA Repealment Actand based on the professional advice further steps if any required will be taken.
b. The Company is suspended from trading of securities at Calcutta Stock ExchangeLimited
a. The directors of the Company are check and take required steps for making anapplication with required authorities based on the professional advice.
b. The directors of the Company are taking necessary steps for delisting of securitiesat Calcutta Stock Exchange Limited.
16. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company as part ofits CSR initiatives has undertaken projects/ programs in accordance with the CSR Policyand the details of the CSR activities are given as Annexure VII forming part of thisReport.
17. CHANGES IN COMPOSITION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. Sutheja K.J. resigned from the post of Company Secretary with effect from 1411'October 2016 and the Board has taken the note for the same.
Ms. Ritu Singh was appointed as Whole Time Company Secretary with effect from 29thNovember 2016 for the Company.
Pursuant to the Section 152 of the Companies Act 2013 and rules made thereunderMs. Anisha Agarwal Women Director of the Company retired at the 24lh AnnualGeneral Meeting and she was eligible for reappointment offered herself for there-appointment at the 24th Annual General Meeting of the Company. She wasappointed as Women Director as required under the Provisions of the Companies Act 2013 andthe rules made thereunder.
18. DIRECTOR'S RESPONSIBILITY STATEMENT:
In Compliance with Section 134(5) of the Companies Act 2013 the Board of Directors tothe best of their knowledge and hereby confirm the following:
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 to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss 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 Directors had laid down internal financial controls to be followed by theCompany and thatsuch internal financial controls are adequate and operating effectively.
f. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
The Board of Directors has constituted four Committees i.e. Audit CommitteeStakeholder Relationship Committee Nomination and Remuneration Committee CorporateSocial Responsibility committee as per requirement of Corporate Governance under SEBI(LODR) Regulation 2015. The majority of the members of these committees are Independentand non-executives.
During the financial year 2016-177 (seven) Audit Committee Meetings 1 (one)Nomination and Remuneration Committee Meeting 13 (Thirteen) Stakeholders RelationshipCommittee Meetings and 1 (One) Corporate Social Responsibility Meetings were held at theCompany as per requirement of Corporate Governance and any other applicable Regulations ofthe SEBI (LODR) Regulation 2015.
19. CFO CERTIFICATION:
CFO Certification Pursuantto SEBI (LODR) REGULATION 2015 forms part of this AnnualReport and annexed to this Report as Annexure VIII.
20. DECLARATION BY. INDEPENDENT DIRECTORS:
All independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149(7) and any other applicable provisions of theCompanies Act 2013 and the rules made thereunder and as per the requirement of SEBI(LODR) Regulation 2015.
21. BOARD EVALUATION!
As per the provisions of the Companies Act 2013 and SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015 the formal annual evaluation was carriedout for the Board's own performance its committee & Individual directors.
The Independent Directors meeting to review the performance of thenon-independent Directors and Board as whole was held on 09.03.2017.
22. BOARD MEETINC.S/COMMITTEE MEETINGS:
During tlie year Six Board Meetings and Twenty-Two Committee Meetings. The details ofall Board meeting and Various Committee's Meeting are given in the Corporate GovernanceReport. The intervening gap between the Meetings was within the time prescribed under theCompanies Act 2013 and the rules made thereunder.
23. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL:
The Code lays down the standard procedure of business conduct which is expectedto be followed by the Directors and the designated employees in their business dealingsand on matters relating to integrity in the work place in business practices and indealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in each situation and the reporting structure.
All the Board Members and the Senior Management personnel have confirmedcompliance with the Code.
The Code of conduct has been posted on the Company website www.ovobelfoods.com.
24. AUDIT COMMITTEE /STAKEHOLDER RELATIONSHIP COMMITTEE /NOMINATION AND REMUNERATIONCOMMITTEE /CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The Board of Directors has constituted four Committees i.e audit committee stakeholderrelationship committee nomination and remuneration committee corporate socialresponsibility committee as per requirement of Corporate Governance under SEB1 (LODR)Regulation 2015 and any other applicable provisions of Statutes. The majority of themembers of these committees are Independent and nonexecutives.
25. SECRETARIAL AUDITOR:
Pursuant to the provisions of Section 204 and other applicable provisions oftheCompanies Act 2013 and the rules made thereunder the Board of Directors has appointed Mr.Rafeeulla Shariff. Practicing Company Secretary Bangalore as Secretarial Auditor toconduct the Secretarial Audit of the Company for the Financial Year 2017-18.
26. STATUTORY AUDITORS:
The Statutory Auditors M/s Nara Mari & Raghavedra Chartered AccountantsBangalore (Firm registration No. 014509S) was appointed as Statutory Auditor of thecompany on Annual GeneralMeetingheld on 29"1 December 2016 for a tenureof five years on as per the provisions of Section 139 of the Companies Act 2013 i.e. theappointment is valid till the conclusion of 29th Annual General Meeting for the Financialyear 2020-2021 subject to the ratification by the members atthe general meeting of theCompany from time to time.
27. STATUTORY AUDITOR'S REPORT:
The observation made in the Auditor Report read together with relevant notes thereonare self-explanatory and the following is the reply given by the management forUnfavorable remarks raised by the auditors.
Point No (i) (b) of CARO Report states that: Physical verification of fixed asset isbeing done in a phased manner. However no physical verification of the fixed asset beencarried out by the management during the year and hence we are unable to comment on thematerial discrepancies arising between the books records and the physical fixed assets.
Management Reply: The Company is taking necessary measures to physically verify thefixed assets. The Company is also planning to increase the frequency of verification offixed assets in the coming future.
Further the Auditors Report along with financials statement and notes thereon annexedto this Report as Annexure IX and forms part of this Report.
28. COST AUDITORS:
The requirement of appointment of cost auditors is not applicable to the company.
29. VICII MECHANISM /WHISTI.E Bl.OWER POI.ICY:
Your Company has laid down a Whistle Blower Policy covering Vigil Mechanism withprotective clauses for the Whistle Blowers to report genuine concerns or grievances. TheWhistle Blower Policy has been hosted on the website of the Companyatwww.ovobelfoods.com/general- information/policies/whistle-blower-policv.
30. RISK MANAGEMENT POLICY:
The Company has developed and implemented a risk management policy which identifiesmajor risks which may threaten the existence of
the Company. The same has also been adopted by your Board and is also subject to itsreview from time to time. Risk mitigation process and measures have been also formulatedand clearly spelled out in the said policy.
31. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO:
a) Conservation of Energy:
With the increase in demand for the non-renewable energy resources such as water andelectricity the Company has been using Wood Fired Boilers in the factory which run on afuel known as Briquettes (Agro waste) instead of electricity.
The Briquettes fuel is made of saw dust groundnut shell coffee husk and tamarindshell.
The consumption of the briquettes per hour is 380 kgs/hr.
The Capacity of the boiler is 2000000 kcals/hr. and the Company has invested Rs.3503000 towards it.
b) Technology Absorption:
The Company continues to keep abreast the developments and seeks to implement thelatest technology in the factory for the forthcoming years.
However there was no technology imported by the Company during the last three years
c) Foreign Exchange Outflow/lnflow:
|Particulars ||31.03.2017 ||31.03.2016 |
| ||(Rupees in lakhs) ||(Rupees in lakhs) |
|Earnings in Foreign Currency ||6813 ||9743 |
|Expenditure in Foreign Currency ||216 ||246 |
32. INDUSTRIAL RELATIONS:
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.
33. MANAGERIAL REMUNERATION:
Disclosures under Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014:
Your Board report that
The ratio (approx.) of the remuneration of each director to the meanremuneration of the employees of the company for the financial year was 21.95:01
The percentage increase in remuneration during the financial year of each:
Executive Director (including Chief Executive Officer); and
Chief Financial Officer and Company Secretary (or Manager if any)
There was increase or decrease in the remuneration of any Executive Director ChiefFinancial Officer or Company Secretary of the Company. Following are the details of thesame:
|Name ||Designation ||Remuneration in the FY 2016-17 (Rupees in lakhs) ||Remuneration for the FY 2015-16 (Rupees in lakhs) ||Increase or Decrease during the FY 2016-17 |
|Shanti Swarup Aggarwal ||Managing Director ||65 ||138 ||Decrease |
|Sudhir Kulkarni ||Chief Financial Officer ||16 ||14 ||Increase |
The percentage increase in the median remuneration of employees in the financialyear is: Not Applicable.
The number of permanent employees on the rolls of company: 110.
The explanation on the relationship between average increase in remuneration andcompany performance: Not Applicable. (Since there is decrease in the managerialremuneration during the financial year).
Average percentile increases already made in the salaries of employee's otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and jus tification thereof and pointout if there are any exceptional circumstances for increase in the managerialremuneration: Not Applicable (there is decrease during the financial year).
The key parameters for any variable component of remuneration availed by thedirectors: There is no variable component of remuneration availed by the directors.
Affirmation that the remuneration is as per the remuneration policy of theCompany: Company affirms that the remuneration is as per the Remuneration policy of theCompany.
Names of the top ten employees in terms of remuneration drawn:
|Name ||Remuneration received ||Nature of employmen t whether contractual otherwise ||Qualincation & Experience ||Date of commcnccmcn tof employment ||Age of the employee ||Percentage of equity shares held by the employee as a remuneration ||Whether any employee is a relative of any direclor/managcr of the Company and il so name of such director/manager |
|S S Aggarval ||6512876 ||Ml) ||BCOM ||0104.2009 ||66 ||Nil ||Nil |
|Samarth Parekh ||3500000 ||Staff ||BCOM ||01042016 ||38 ||Nil ||Nil |
|Sudhir Kulkarni ||1669734 ||CFO ||BCOM ||17.02.2011 ||57 ||Nil ||Nil |
|Mohan. T. Gangoor ||1252.484 ||Staff ||BE(Mechanica n ||01.081997 ||49 ||Nil ||Nil |
|Sahadevan C ||1036644 ||Staff ||M.sc M.phil.R.cd Ph.l) ||1909.1998 ||48 ||Nil ||Nil |
|Vishwaiiath Prabhti K ||1011706 ||Staff ||8 COM ||10.10.2012 ||52 ||Nil ||Nil |
|Sunil Varghe.se P ||787250 ||Staff ||BCOM ||16.03.2015 ||41 ||Nil ||Nil |
|Vinod Namderao Hirde ||732980 ||Staff ||R.V. Sc &A.H M.V.Sc (VPHJ ||20.08.2015 ||30 ||Nil ||Nil |
|Muniyappa U ||624260 ||Staff ||ITI (Electrical) Diploma in Electronics Engineering ||19.09.1996 ||46 ||Nil ||Nil |
|Vijay Kumar K N ||533.884 ||Staff ||ITI(l'itter) ||23.01.1996 ||42 ||Nil ||Nil |
The Name of every employee who:
(i) if employed throughout the financial year was in receipt of remuneration for thatyear which in the aggregate was not less than one crore and two lakh rupees: Nil
(ii) if employed for a part of the financial year was in receipt of remuneration forany part of that year at a rate which in the aggregate was not less than eight lakhsand fifty thousand rupees per month: Nil
(iii) if employed throughout the financial year or part thereof was in receipt ofremuneration in thatyear which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the company: Nil.
34. PREVENTION OF SEXUAL HARRASSMENT:
In terms of the provisions of the Sexual Harassment of women at workplace (PreventionProhibition and Redressal) Act; 2013 and the Rules there under the Company has laid downthe policy for prevention and redressal of complaints of sexual harassment at workplace.There was no complaint related to sexual / harassment during the year 2016.
35. FRAUD REPORTING:
There have been no frauds reported by the Auditors of the Company to the AuditCommittee or the Board of Directors under sub-section (12) of section 143 ofthe CompaniesAct 2013 during the financial year.
36. CHANGE OF REGISTRAR & SHARE TRANSFER AGENTS:
Company changed the Registrar & Share T ransfer Agents of the Co nipany w.e.f.05/05/2016 from the existing Registrar & Share Transfer Agents M/s IntegratedEnterprises India Limited to new Registrar & Share Transfer Agents M/s MaheshwariDatamatics Private Limited situated at No. 23 R.N Mukherjee Road 5th Floor Kolkata -700 001. The Board placed on record its sincerest thanks and gratitude for the valuablecontribution made by M/s Integrated Enterprises India Limited towards the growth anddevelopment of the Company during their tenure as Registrar & Share Transfer Agents.
The Board appreciates the commitment and dedication of its employees across all thelevels who have contributed to the growth and sustained success ofthe Company. We wouldlike to thank all our clients vendors bankers and other business associates for theircontinued support and encouragement during the year.
For and on behalf of the Board of Ovobel Foods Limited
|Shanti Swarup Aggarwal ||Swapan Kumar Majumder |
|Managing Director ||Director |
|DIN:00322011 ||DIN:03178122 |
|Place: Kolkata ||Place: Kolkata |
|Date: 30.05.2017 ||Date: 30.05.2017 |
|Sudhir Kulkarni ||Ritu Singh |
|Chief Financial Officer ||Company Secretary & Compliance Officer |
|PAN:AFEPK8240D ||Membership No.: A24934 |
|Place: Bangalore ||Place: Bangalore |
|Date: 30.05.2017 ||Date: 30.05.2017 |