To the members of Ovobel Foods Limited
Your Directors are pleased to present the 24th (Twenty Fourth) AnnualReport of Ovobel Foods Limited together with the Audited Statement of Accounts forthe year ended 31st March 2016.
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 31.03.2016 ||For the year ended 31.03.2015 |
|Total Income ||11513 ||10674 |
|Total Expenses excluding Finance Cost & Depreciation ||10679 ||9183 |
|Finance Cost & Depreciation ||217 ||148 |
|Total Expenses including Finance Cost & Depreciation ||10896 ||9331 |
|Net Profit (Loss) Before Tax ||617 ||1343 |
|Tax Expenses || || |
|Current Tax ||186 ||33 |
|Deferred Tax ||13 ||388 |
|Net Profit (Loss) After Tax ||418 ||922 |
|Earnings Per Share - Basic & ||3.98 ||8.78 |
|Diluted (in Rs.) ||3.98 ||8.78 |
The entire profit 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 increased from 9888 lakhs in the previous year to10642 lakhs.
The Profit Before Tax (PBT) for the period decreased from 1343 Lakhs (previousyear) to 617 Lakhs (Current year).
Profit after tax (PAT) for the period decreased from 922 Lakhs (previous year)to 418 lakhs (Current year).
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 andthe Companies (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 3 lakhs - March 2016)
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 significant and 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 policies procedures and structure to enableimplementation of appropriate internal financial controls across the Company. Thesecontrol processes enable and ensure the orderly and efficient conduct of 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. T o maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board & Managing Director.
11. 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 I.
12. 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 Policy andthe details of the CSR activities are given as Annexure VII forming part of thisReport.
13. CHANGES IN COMPOSITION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. Narendra Haldawar was appointed as an Additional Director with effect from31st December 2014 and was regularized as a Director of the Company at theAnnual General Meeting of the Company held on 25th September 2015.
Ms. Anisha Agarwal Director of the Company retires at this Annual GeneralMeeting being eligible for reappointment offers herself for the appointment at the ensuingAnnual General Meeting of the Company. She was appointed as Women Director as requiredunder the Provisions of the Companies Act 2013 and the rules made thereunder.
None of the Directors of your Company are disqualified as per provisions ofSection 164(2) and any other applicable provisions of the Companies Act 2013 and therules made thereunder. The Directors of the Company have made necessary disclosures asrequired under various provisions of the Companies Act 2013.
14. DIRECTOR'S RESPONSIBILITY STATEMENT:
In Compliance with Section 134(5) of the Companies Act 2013 the Board of Directors
to the 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 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 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 that such 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.
15. CORPORATE GOVERNANCE:
Your Company is committed to observe good Corporate Governance practices. The report onCorporate Governance for the financial year ended March 31 2016 as per Regulation 34(3)read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of this Annual Report and is annexed to this Report as AnnexureV. The requisite certificate from Statutory Auditors M/s Guru & Jana CharteredAccountants Bangalore confirming Compliance with the conditions of Corporate Governanceis attached to this Report as Annexure IV.
16. 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 AnnexureIII. Certain Statements in the said report may be forward looking. Many factors mayaffect the actual results which could be different from what the Directors envisage interms of the future performance and outlook.
17. CFO CERTIFICATION:
CFO Certification Pursuant to SEBI (LODR) REGULATION 2015 are forms part of thisAnnual Report and annexed to this Report as Annexure VIII.
18. 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.
19. 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 thenonIndependent Directors and Board as whole was held on 30.03.2016.
20. BOARD MEETINGS:
During the year Fourteen Board Meetings and Five Audit Committee Meetings were convenedand held. The details of all Board meeting and Various Committee's Meeting are given inthe Corporate Governance Report. The intervening gap between the Meetings was within thetime period prescribed under the Companies Act 2013 and the rules made thereunder.
21. 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 of the website.
22. 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 in particular on matters relating to integrity in the work place in businesspractices and in dealing with stakeholders. The Code gives guidance through examples onthe expected behaviour from an employee in a given 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.
23. 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 SEBI (LODR)Regulation 2015 and any other applicable provisions
of Statutes. The majority of the members of these committees are Independent andnon-executives.
24. SECRETARIAL AUDITOR:
Pursuant to the provisions of Section 204 and other applicable provisions of theCompanies Act 2013 and the rules made thereunder the Board of Directors has appointedMr. Rafeeulla Shariff Practicing Company Secretary Bangalore as Secretarial Auditor toconduct the Secretarial Audit of the Company for the Financial Year 2015-16.
25. 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 as AnnexureVI.
In Secretarial Audit report issued by Mr. Rafeeulla Shariff Practising CompanySecretary for the Financial Year 2015-16 the following observations were made.
The Company is suspended from trading of its equity shares at Bombay Stock ExchangeLimited from 07th January 2002 due to penal reasons. However the Company isunder the process of revocation of suspension from trading of its securities and beforesigning of this report the Company has submitted application for revocation to BombayStock Exchange Limited on 08th July 2015.
The directors of the Company are taking necessary steps for revocation of Suspension oftrading of its equity shares at Bombay Stock Exchange Limited and the order for revocationof suspension is expected to be received in the financial year 2016-17.
The Company is suspended from trading of securities at Calcutta Stock Exchange Limited
The directors of the Company are taking necessary steps for revocation of Suspensionfrom trading of securities at Calcutta Stock Exchange Limited.
The Statutory Auditors M/s Guru & Jana Chartered Accountants Bangalore hascompleted their tenure as per the provisions of Section 139 of the Companies Act 2013 andthe rules made thereunder. The Board will look into this and will recommend to appoint anyother firm as Statutory Auditors of the Company in the ensuing Annual General Meeting.
27. STATUTORY AUDITOR'S REPORT:
The observation made in the Auditor Report read together with relevant notes thereonare self-explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013.
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. VIGIL MECHANISM /WHISTLE BLOWER POLICY:
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 Company atwww.ovobelfoods.com/general-information/policies/whistle-blower-policy.
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 beenadopted by your Board and is also subject to its review from time to time. Risk mitigationprocess and measures have been also formulated and 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 450 kgs/hr and the consumption of agrowaste is 925 kgs/hr.
The Capacity of the boiler is 2000000 kcals/hr and the Company has investedRs.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/Inflow:
|Particulars ||31st March 2016 ||31st March 2015 |
| ||(Rupees in lakhs) ||(Rupees in lakhs) |
|Earnings in Foreign ||9743 ||9312 |
|Currency || || |
|Expenditure in Foreign ||214 ||165 |
|Currency || || |
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 20:1
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)
The particulars of remuneration of directors & KMP has been mentioned in Annexure IMGT-
9 of this Report
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
Variations in the market capitalization of the company price earnings ratio asat the closing date of the current financial year and previous financial year andpercentage increase over decrease in the market quotations of the shares of the company incomparison to the rate at which the company came out with the last public offer in case oflisted companies and in case of unlisted companies the variations in the net worth ofthe company as at the close of the current financial year and previous financial year:
Currently the trading of the securities of the Company in the Stock Exchange issuspended due to which the market value of its shares is unavailable. However the Companyhas submitted application to the Bombay Stock Exchange for revocation of suspension oftrading in securities of the Company.
Average percentile increase already made in the salaries of employees other thanthe managerial 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: NotApplicable
Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company: Since the Company is still coping with the accumulated lossesthe remuneration paid to its Managerial Personnel cannot be compared with the performanceof the Company.
However the remuneration of the Key Managerial Personnel is reviewed from time to timebased on their performance and contribution to the Company.
The key parameters for any variable component of remuneration availed by thedirectors: There is no variable component of remuneration availed by the directors;
The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year: there were no such employees in the Company who receiveremuneration in excess of the highest paid director during the year.
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.
No employee during the year-
(i) Was in receipt of remuneration for that year which in the aggregate was not lessthan sixty lakh rupees;
(ii) Was in receipt of remuneration for any part of that year at a rate which in theaggregate was not less than five lakh rupees per month;
Was in receipt of remuneration in that year which in the aggregate or as the case maybe at a rate which in the aggregate is in excess of that drawn by the managing directoror wholetime director or manager and holds by himself or along with his spouse anddependent children not less than two percent of the equity shares of the company.
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 of the CompaniesAct 2013 during the financial year.
36. CHANGE OF REGISTRAR & SHARE TRANSFER AGENTS:
Company changed the Registrar & Share Transfer Agents of the Company 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. The Board placed on record its sincerest thanks and gratitudefor the valuable contribution made by M/s Integrated Enterprises India Limited towards thegrowth and development of the Company during their tenure as Registrar & ShareTransfer Agents.
The Board appreciates the commitment and dedication of its employees across all thelevels who have contributed to the growth and sustained success of the 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: 30th May 2016 ||Date: 30th May 2016 |
|Sudhir Kulkarni ||Sutheja K.J |
|Chief Financial Officer ||Company Secretary |
|Place: Bangalore ||Place: Bangalore |
|Date: 31st May 2016 ||Date: 31st May 2016 |