ADF Foods Limited
Your Directors have pleasure in presenting the Thirty First Annual Report together withthe Audited Financial Statements for the Financial Year ended March 31 2021.
A. FINANCIAL RESULTS:
The performance of the Company for the financial year ended March 31 2021 issummarized below:
|Particulars || |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue from operations ||23664.10 ||19447.27 ||36932.42 ||28520.70 |
|Other Income ||424.85 ||937.23 ||600.46 ||942.04 |
|Total Income ||24088.95 ||20384.50 ||37532.88 ||29462.74 |
|Total Expenditure || || || || |
|Cost of materials consumed ||10733.14 ||8180.85 ||10733.14 ||8180.85 |
|Purchase of Stock-in-trade ||740.43 ||747.01 ||12488.52 ||8644.83 |
|Changes in inventories of finished goods work-in- progress and stock-in-trade ||(165.80) ||(47.47) ||(1709.26) ||(1918.82) |
|Employee benefits expense ||1476.72 ||1511.84 ||1764.35 ||1764.49 |
|Financial cost ||115.83 ||133.41 ||115.99 ||133.42 |
|Depreciation and amortization ||588.77 ||551.60 ||588.99 ||552.71 |
|Impairment losses ||- ||- ||- ||35.53 |
|Other expenses ||5680.38 ||5220.95 ||6879.78 ||6538.43 |
|Total Expenses ||19169.47 ||16298.19 ||30861.51 ||23931.44 |
|Profit before exceptional and extraordinary items and tax ||4919.48 ||4086.31 ||6671.37 ||5531.30 |
|Exceptional Items ||- ||(32.51) ||- ||(32.51) |
|Profit before tax ||4919.48 ||4053.80 ||6671.37 ||5498.79 |
|Current tax ||1225.51 ||981.94 ||1284.42 ||1003.45 |
|Deferred tax ||25.41 ||(75.29) ||380.04 ||217.86 |
|Prior year's tax adjustment ||- ||- ||- ||- |
|Total tax expenses ||1250.92 ||906.65 ||1664.46 ||1221.31 |
|NetProfit(+) / ||3668.56 ||3147.15 ||5006.91 ||4277.48 |
|Less: share of minority interest ||- ||- ||- ||- |
|Profit/loss for the period after minority interest ||3668.56 ||3147.15 ||5006.91 ||4277.48 |
|Net other Comprehensive income for the year ||189.53 ||(333.98) ||183.24 ||(313.35) |
|Total comprehensive income for the year ||3858.09 ||2813.17 ||5190.15 ||3964.13 |
|EPS (Basic) ||18.32 ||15.72 ||25.01 ||21.36 |
|EPS (Diluted) ||17.56 ||15.72 ||23.96 ||21.36 |
Previous year's figures have been re-grouped wherever necessary.
'i!"4i'"f ti wwd.d ..
The S total income for the financial year ended March 31 2021 stood at tandalone R24088.95Lakhs as against the c orresponding figures of previous financial year which stoodat R20384.50 Lakhs representing growth of 18%. The Consolidated total income forthe financial year ended March 31 2021 stood at R37532.88 Lakhs as against thecorresponding figures of previous financial year which stood at R29462.74 Lakhsrepresenting growth of 27%.
The S Profit Before Tax (PBT) for the financial year ended March 31 2021 stood attandalone R4919.48 Lakhs as against the corresponding figures of previousfinancial year which stood at R4053.80 Lakhs representing growth of 21%. TheConsolidated Profit Before Tax (PBT) for the financial year ended March 31 2021 stood at R6671.37Lakhs as against the corresponding figures of previous financial year which stood at R5498.79Lakhs representing growth of 21%.
B. BUSINESS DEVELOPMENT:
During the year under review the Company launched new variants under Ashoka brandunder the range of frozen vegetables and Kathi rolls. The Company also extended itscurrent product line of Dipping Sauces under the ambient range.
During the year the Company setup a manufacturing facility in Surat Gujarat on lease.The facility is expected to incr the production capacity by 1950 MTPA. This leasingoption is an interim arrangement until further ease Greenfield expansion plans of theCompany become operational. The facility has been established in response to the incrdemand for the Company's core products - frozen bread snacks and ready-to-eat productseased and was funded through internal accruals. The facility has started commercialproduction of frozen breads w.e.f. March 25 2021.
The C ompany also gained additional listings in supermarkets in Canada and USA and haswitnessed good product offtake from this channel.
During the year more products were added in the product basket of the Company'sexisting Agency Distribution business with a leading FMCG Company.
The C US Subsidiary recently acquired 66000 sq. feet of warehouse on leasehold basissituated at ompany's New Jer USA. This is in line with the Company's goal of expanding thedistribution network to ensure sey uninterrupted product supply with direct reach to theretailers.
C. C OVID-19 UPDATES:
The global spread of COVID-19 has created an unprecedented situation for themanufacturing sector resulting from the mandated lockdowns across the global ecosystem.
Supply chains were disrupted in the early months of FY 2020-21 directly impacting theflow of raw materials and packaging material. Restrictions on transportation and shipmentposed a challenge to food logistic as well.
However the Company managed to recover early because of the essential nature of itsproduct category. During lockdown there has been a major rise in the demand of packagedfood products as most consumers are working from home and find these food itemsconvenient easily accessible and hygienic.
Currently the Company's both manufacturing plants are operating at normal capacity andfollow stringent social distancing and sanitization practices. The battle against thePandemic COVID-19 however continues unabated. The Company is determined to deliver betterperformance in the years to come.
D. MA TERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THEFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the Financial year of the Company to whichthe Financial Statements relate and the date of this Report.
E. SHARE CAPITAL:
The paid up Equity Share Capital as on March 31 2021 was R20.02 Crore. Duringthe year under review the C ompany had allotted 1950000 Convertible Warrants onpreferential basis to certain Promoters and Non-Promoters of the Company at a price of R362/-per Warrant with a right to the Warrant holders to apply for and be allotted 1 (One)Equity Share of the face value of R10/- each at a Premium of R352/- pershare for each W aggregating to arrant R70.59 Crore (Rupees Seventy Crores FiftyNine Lakhs only). As on March 31 2021 warrant subscription amount equivalent to 25% oftotal subscription amount has been paid by the Warrant holders.
The Board of Directors has recommended a Final Dividend @ R3/- per share (i.e.30%) on equity shares of face value of R 10/- each f the Financial Year ended March31 2021 subject to the approval of the shareholders in the or ensuing Annual GeneralMeeting.
In vie of the changes made under the Income Tax Act 1961 by the Finance Act 2020dividends paid or w distributed by the Company shall be taxable in the hands of theShareholders. The Company shall accordingly make the payment of the final dividend afterdeduction of tax at source.
G. TRANSFER TO RESERVES:
During the year under review your Company has not transferred any amount to GeneralReserves. Further the
Company does not propose to transfer any amount to general reserve on declaration ofthe final dividend.
H. SUBSIDIARY COMPANIES:
Your C has three Subsidiaries viz. ADF Foods UK Ltd. Power Brands (Foods) Pvt. Ltd.and ADF Foods ompany (India) L and two step down Subsidiaries viz. ADF Holdings (USA) Ltd.and ADF Foods (USA) Ltd. as on td. March 31 2021. Power Brands (Foods) Pvt. Ltd. isundergoing Voluntary Liquidation vide Special Resolution passed b the Members on November5 2012. Hence the annual financial statements as on March 31 2021 of y the said S arenot required to be prepared. During the year the Board of Directors reviewed the affairsubsidiary of the S ubsidiaries in accordance with Section 129(3) of the Companies Act2013. The Company has prepared consolidated financial statements of the Company whichforms part of the Annual Report. The salient features of the financial statements of theSubsidiaries are set out in the prescribed form AOC-1 which is attached to the financialstatements. The statement also provides the details of performance and financial positionof the Company's Subsidiaries.
During the year under review the Company did not have any JVs and/or Associatecompanies.
The financial statements of each of the Subsidiaries may be accessed on the Company'swebsite www.adf-foods.com.
I. B OARD OF DIRECTORS AND COMMITTEES: o Directors
During the year the following changes took place in the Board composition:
|Name of Director ||Position held ||Date of Resignation/ Appointment |
|Mr. Chandir G. Gidwani ||Non-Executive Independent Director ||Regularised appointment as Non-Executive Independent Director f period upto February 6 2025 in the Annual General or Meeting held on August 5 2020. |
|Ms. Deepa Misra Harris ||Non-Executive Independent Director ||Regularised appointment as Non-Executive Independent Director for period upto March 24 2025 in the Annual General Meeting held on August 5 2020. |
|Mr. Naresh Kothari ||Non-Executive Independent Director ||Resigned as an Independent Director of the Company with ect eff from December 21 2020 due to other pre-occupations. |
In the opinion of the Board Mr. Chandir Gidwani and Ms. Deepa Misra HarrisIndependent Directors who were appointed during the year possess integrity expertise andexperience (including the proficiency).
o Relationship between Directors Inter-se
The details of inter-se relationship between Directors are given in theCorporate Governance Report.
o Meetings of Board of Directors
Five meetings of the Board of Directors of the Company were held during the year. Thedetail of the Board M are provided in the Report on Corporate Governance of the Companywhich forms part eetings of this Annual Report.
o Committees of the Board
The Company has duly constituted the Committees of the Board as required under theCompanies Act 2013 read with applicable Rules made thereunder and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 as amended.
The Board of Directors of the Company has formed an Audit Committee which consists ofMr. Chandir G. Gidwani Independent Director as Chairman Mr. Ravinder Kumar JainIndependent Director and Mr. Viren A. Merchant Non-Executive Non-Independent Director asMembers of the Audit Committee.
All the recommendations of the Audit Committee were accepted by the Board during thefinancial year under review.
The other Committees of the Board are:
i) Nomination and Remuneration Committee
ii) Shareholders' Grievance/ Stakeholders' Relationship Committee
iii) Corporate Social Responsibility Committee
iv) Risk Management Committee
The details with respect to the constitution/ reconstitution powers roles terms ofreference meetings held and attendance of the Members at such meetings of the relevantCommittees and such other related details are provided in the Report on CorporateGovernance of the Company which forms part of this Annual Report.
o Directors' Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(5) of the Companies Act 2013:
a) that in the preparation of the annual financial statements for the financial yearended March 31 2021 the applicable accounting standards have been followed along withproper explanation relating to material departures if any;
b) that such accounting policies as mentioned in Note 2 of the Notes to the StandaloneFinancial Statements and in Note 2 of the Notes to the Consolidated Financial Statementshave been selected and applied consistently and judgment and estimates have been made thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company for the financial year and of the Profit and Loss of the Company for thefinancial year ended March 31 2021;
c) that proper and sufficient 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 financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
o Independent Directors' Declaration
The Independent Directors have submitted a declaration that each of them meet thecriteria of independence as provided in Sub-Section (6) of Section 149 of the CompaniesAct 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended.
o Meeting of Independent Directors
A meeting of the Independent Directors was held on February 26 2021 in order to takeinto consideration the performance of the Board as a whole the Chairman and theNon-Independent Directors and timeliness of flow of information between the Companymanagement and the Board that would be necessary for the Board to effectively andreasonably perform its duties was reviewed in the said meeting. All the IndependentDirectors were present in the meeting.
o Performance Evaluation of the Board
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance of Chairman its Committeesand the Directors individually.
The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.
o Familiarization Program for Independent Directors
The Independent Directors of the Company are eminent personalities having wideexperience in the field of business finance industry and law. Their presence on theBoard has been advantageous and fruitful in taking business decisions. IndependentDirectors are appointed as per the Governance guidelines of the C ompany with managementexpertise and wide range of experience. The Directors appointed by the Boar are giveninduction and orientation with respect to the Company's vision strategic direction dcore v alues including ethics corporate governance practices financial matters andbusiness operations by ha one-to-one meeting with the Managing Director and through aCorporate Presentation. The ving new Boar Members are also acquainted to access thenecessary documents/ brochures Annual Reports d and P olicies available on the Company'swebsite www.adf-foods.com t o enable them to familiarize with the C ompany's proceduresand practices. Periodic presentations are made by the Senior Management Statutory andInternal Auditors at the Board/Committee meetings on business and performance updates ofthe Company working capital management fund flows business risks and its mitigationstrategy effectiveness of Internal Financial Controls Subsidiary Companies informationupdates on major litigations impact of regulatory changes on strategy etc. Updates onrelevant statutory changes encompassing important laws are regularly intimated to theIndependent Directors.
Familiarization Programme of the Company as specified under Regulation 46 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is displayed on theCompany's website www.adf-foods.com and is available under the weblink:
https://www.adf-foods.com/wp-content/uploads/2021/04/Familiarization-Programme-2020-21.pdfo P olicy of Directors' Appointment and Remuneration
In accordance with the provisions of Section 134(3)(e) of the Companies Act 2013("the Act") read with
Section 178(3) of the Act and the SEBI (Listing Obligations and DisclosureRequirements) Regulations
2015 the Company has formulated a Policy on Directors' appointment and remunerationincluding criteria f determining qualifications positive attributes independence of aDirector and other matters or which is covered in the Corporate Governance Report whichforms part of this Report.
J. CASH FLOW STATEMENT:
The Cash Flow Statement pursuant to Regulation 34(2) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed to this Report.
K. C ONSOLIDATED ACCOUNTS:
The C onsolidated Accounts of the Company are prepared in compliance with Regulation34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andin accordance with the Companies (Indian A ccounting Standards) Rules 2015 (IND AS) asprescribed under Section 133 of the Companies Act 2013. The Consolidated Accounts of theCompany and its Subsidiaries are annexed to this Report.
o Report on Corporate Governance
In compliance with the requirements of Regulation 34(3) and Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate report on CorporateGovernance along with Auditors' certificate on its compliance has been provided elsewherein this Annual Report which forms part of this Report.
Report on Management Discussion and Analysis is provided in separate section atAnnexure A and forms part of this Annual Report. Various information required to bedisclosed under the Act and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is set out in the Annexure B and forms part of this Report.
o Vigil Mechanism/Whistle Blower Policy
The Company has adopted a Vigil Mechanism/Whistle Blower Policy' pursuant toSection 177 of the C ompanies Act 2013 read with Regulation 22 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 with an objective to conductits affairs in a fair and transparent manner and by adopting the highest standards ofprofessionalism honesty integrity and ethical behavior.
With the adoption of this Policy the Company has put in place a mechanism wherein theEmployees are free t r o to the Management any actual or possible violation of thePrinciples or any other unlawful eport or unethical or improper practice or act oractivity of the Company including leakage of Unpublished Price Sensitive Information.Under the Whistle Blower Policy the confidentiality of those reporting violation(s) isprotected and they are not subject to any discriminatory practices. No personnel has beendenied access to the M anagement and the Audit Committee. The mechanism is reviewed by theAudit Committee of the Company in accordance with the SEBI (LODR) Regulations 2015. TheCompany did not receive any such complaints during the year hence no complaints werepending as on March 31 2021.
Whistle Blower Policy of the Company is displayed on the Company's websitewww.adf-foods.com and is a vailable under the web link:https://www.adf-foods.com/wp-content/uploads/2019/04/Whistle-Blower-Policy-2.pdf
o Nomination and Remuneration Policy
The Nomination and Remuneration Policy is attached as Annexure II to the Board's Reportforming part of the Annual Report and is also available on the website of the Companywww.adf-foods.com.
o Risk Management Framework
The Company has adopted Business Risk Management System (BRMS) for mitigating variousrisks associated and identified across all levels within the organization. This model isbased on ISO 31000. BRMS enables the management to review the business risks on periodicalbasis and to bring the high risk areas to the immediate attention of the Board.
As per the amendments in SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 vide the dated May 5 2021 constitution of Risk Management Committeehas been made applicable to Top 1000 listed companies based on market capitalization. Inview of the same Board of
Directors at its Meeting held on May 24 2021 formed Risk Management Committee with thefollowing persons as its Members:
|Sr. No. Name of the Member ||Category ||Chairman/ Member |
|1. Mr. Chandir G. Gidwani ||Independent Director ||Chairman |
|2. Mr. Bimal R. Thakkar ||Chairman Managing Director & CEO ||Member |
|3. I Mr. Shardul Doshi ||Chief Financial Officer ||Member |
o Internal Financial Controls
Your Company has in place adequate internal financial controls commensurate with thesize scale and c omplexity of its operations. Review of the internal financial controlsenvironment of the Company was under during the year under review which coveredverification of entity level controls process taken level c ontrol and IT controlsreview of key business processes and analysis of risk control matrices etc. During theperiod under review effectiveness of internal financial controls was evaluated.Reasonable Financial C are operative for all the business activities of the Company and nomaterial weakness ontrols in the design or operation of any control was observed.
o Other Policies under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015
In accordance with the provisions of Regulation 30 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has framed a Policy fordetermination of Materiality for disclosure of events or information.
The same has been hosted on the website of the Company at the link:https://www.adf-foods.com/wp-content/uploads/2016/01/Material-Events-21.12.2017.pdf
The details of the other policies of the Company can be obtained using the followingweb-links:
|Sr. No. Policy ||Link |
|1 Code of Conduct ||https://www.adf-foods.com/wp-content/uploads/2016/12/ADF-Code- of-Conduct.pdf |
|2 Nomination and Remuneration Policy ||and-Remuneration-Policy.pdf https://www.adf-foods.com/wp-content/uploads/2021/05/Nomination- |
|3 Insider Trading Code ||https://www.adf-foods.com/wp-content/uploads/2019/04/Insider- Trading-Code-2.pdf |
|4 Code of Practices & Procedures for Fair Disclosure of UPSI ||https://www.adf-foods.com/wp-content/uploads/2020/07/Code-of- Practices-Procedures-for-Fair-Disclosure-of-UPSI.pdf |
|5 Policy for Procedure of inquiry in case of leak of UPSI ||https://www.adf-foods.com/wp-content/uploads/2019/04/Policy-for- Procedure-of-inquiry-in-case-of-leak-of-UPSI.pdf |
|6 Policy for Determination of Legitimate Purposes ||https://www.adf-foods.com/wp-content/uploads/2019/04/Policy-for- Determination-of-Legitimate-Purposes.pdf |
|7 Whistle Blower Policy ||https://www.adf-foods.com/wp-content/uploads/2019/04/Whistle- Blower-Policy-2.pdf |
|8 Related Party Transactions Policy ||https://www.adf-foods.com/wp-content/uploads/2017/03/Related- Party-Transactions-Policy-1.pdf |
|9 Material Subsidiary Policy ||https://www.adf-foods.com/wp-content/uploads/2019/04/Policy-for- Determining-Material-Subsidiary.pdf |
|10 CSR Policy ||https://adf-foods.com/wp-content/uploads/2021/07/CSR-Policy-1.pdf |
|11 Familiarization Program ||https://www.adf-foods.com/wp-content/uploads/2021/04/Familiarization- Programme-2020-21.pdf |
|12 Board Diversity Policy ||https://www.adf-foods.com/wp-content/uploads/2016/01/ADF-Board- Diversity-Policy.pdf |
|13 Sexual Harassment policy ||https://www.adf-foods.com/wp-content/uploads/2016/01/ADF-Sexual- Harassment-policy.pdf |
|14 Preservation of Documents ||https://www.adf-foods.com/wp-content/uploads/2016/01/Preservation- of-Documents.pdf |
|15 Archival Policy ||https://www.adf-foods.com/wp-content/uploads/2016/05/ADF-Archival- Policy.pdf |
|16 Dividend Distribution Policy ||https://adf-foods.com/wp-content/uploads/2021/07/Dividend- Distribution-Policy-1.pdf |
o Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and
Redressal) Act 2013.
The Company has a policy on Prevention of Sexual Harassment of Women at Workplacepursuant to the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Company did not receive any such complaintsduring the financial year 2020-21.
The Prevention of Sexual Harassment Policy of the Company is displayed on the Company'swebsite www.adf-foods.com and is available under the web-link:https://www.adf-foods.com/wp-content/uploads/2016/01/ADF-Sexual-Harassment-policy.pdf
The Company has duly complied with the provisions relating to the constitution ofInternal Complaints
Committee under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal)
During the FY 2020-21 no complaints were received and pending to be resolvedpertaining to the sexual harassment.
M. P ARTICULARS OF EMPLOYEES:
o K ey Managerial Personnel (KMP)
Mr. Bimal R. Thakkar Chairman Managing Director & CEO Mr. Devang Gandhi ChiefOperating Officer Mr. Shar Doshi Chief Financial Officer (appointed w.e.f. August 142020) and Ms. Shalaka Ovalekar dul Company Secretary & Compliance Officer are theKMPs of the Company as on date of this Report.
There were no employees drawing remuneration exceeding the monetary ceiling of R1.02Crores per annum or R8.50 Lakhs per month during the financial year 2020-21 ifemployed for a part of the year as prescribed under the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 except Mr Bimal R. Thakkar ChairmanManaging Director & CEO of the Company whose remuneration . is commission based anddrawn from the Company's Subsidiary.
The information required under Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is given at Annexure I that forms part of the Board's Report.
o Human Resource and Employee Relations
The Company has always perceived its Manpower as its biggest strength. The emphasis wason grooming in-house talent enabling them to take higher responsibilities. The Employeerelations continue to be cordial at all the divisions of the Company. Your Directors placeon record their deep appreciation for exemplary contribution of the employees at alllevels. Their dedicated efforts and enthusiasm have been integral to your Company's steadyperformance.
N. P ARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT:
The L oans Guarantees and Investments covered under Section 186 of the Companies Act2013 form part of the Notes to the Financial Statements provided in this Annual Report.
O. P ARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All r party transactions that were entered into during the financial year were on anarm's length basis elated and w in the ordinary course of business. There are nomaterially significant related party transactions ere made b the Company withPromoters Directors Key Managerial Personnel or other designated persons subsidiarycompanies and other related parties which may have a potential conflict with the interestof the
Company at large. All Related Party Transactions are placed before the Audit Committeeand also the Board for appr Prior Omnibus approval of the Audit Committee is obtained onyearly basis for the transactions oval. which are of a foreseen and repetitive nature. Astatement giving details of all related party transactions is placed bef the AuditCommittee and the Board of Directors for their approval/ noting on a quarterly basis. oreThe policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website.
P ursuant to Clause (h) Sub- ofSection(3) of Section 134 of the Act and Rule 8(2) ofthe Companies (Accounts)
Rules 2014 the disclosure of particulars of contracts/ arrangements entered into bythe Company with related par as specified in Sub-Section (1) of Section 188 of theCompanies Act 2013 are disclosed in ties Form AOC-2 which is attached as Annexure V tothis Report.
Pursuant to requirements of Regulation 16(1)(c) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Company has formulated a Policy ondetermining Material Subsidiaries'. The Policy is posted on website of the Company viz.www.adf-foods.com.
The web link of the said Policy is:
P. PUBLIC DEPOSITS:
Y our Company has not accepted any deposit within the meaning Section 73 and 76 of theCompanies Actof
2013 and the Rules made thereunder during the financial year 2020-21.
Q. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
Pursuant to the provisions of Section 125(5) of the Companies Act 2013 dividendspertaining to the financial year 2012-13 (Final) amounting to R1400870/- whichremained unpaid or unclaimed for a period of 7 years were tr ansferred by the Company tothe Investor Education and Protection Fund during the financial year under review.
T ransfer of Equity Shares to the Demat account of IEPF Authority -
P ursuant to the provision of Section 124(6) of the Companies Act 2013 read with theInvestor Education and
Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016(Rules') as amended from time to time it is mandatory for the Company to transferall the shares in the name of Investor Education and
Protection Fund (IEPF) in respect of which dividend has not been claimed for sevenconsecutive years or more.
In c ompliance with the said Rules during the financial year 2020-21 there were 247shareholders holding 31292 equity shares of R10/- each whose shares weretransferred to IEPF.
The list of the aforesaid shareholders whose shares were transferred to IEPF isavailable at the below mentioned web-link:https://www.adf-foods.com/wp-content/uploads/2020/11/Details-of-Shares-Transferred-to-IEPF-2020.pdf
R. C ORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
The C has a Corporate Social Responsibility (CSR) Policy and set up CSR Committee andthe same ompany is curr comprising of four Members viz. Mr. Viren Merchant Non-ExecutiveNon-Independent Director ently Mr. Bimal R. Thakkar Chairman Managing Director and CEOMr. Jay M. Mehta Non-Executive Non-Independent Director and Ms. Deepa Misra HarrisNon-Executive Independent Director.
During the Financial Year 2020-21 the Company was required to spend an amount of R8168774.44/-on the CSR activities pursuant to Section 135 of the Companies Act 2013 including anamount of R479597/- which was unspent in the FY 2019-20.
During the year the Company had spent an amount of R8170094/- towards variousmeaningful CSR activities in the areas such as education for underprivileged anddisabled covid relief measures food and medical e of poor people women empowermentanimal protection environment protection xpenses through tree plantation etc.
The CSR Policy of the Company and the relevant report as per the Companies (CorporateSocial
Responsibility Policy) Rules 2014 have been disclosed in Annexure IV to this Report.
S. BUSINESS RESPONSIBILITY REPORT:
A Business Responsibility Report as per Regulation 34 of the Listing Regulationsdetailing the various initiatives taken by the Company on the environmental social andgovernance front forms part of this Annual Report as Annexure C.
T. ANNU AL RETURN:
P ursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason March 31 2021 is available on the Company's website on:https://adf-foods.com/wp-content/uploads/2021/08/Annual-Return-2020-21.pdf
U. A UDITORS AND THEIR REPORT:
o S tatutory Auditors
M/s. Kalyaniwalla & Mistry LLP Chartered Accountants Mumbai (Registration No.104607W/W100166) are the S Auditors of the Company. At the Twenty-Ninth AGM held onSeptember 25 2019 the tatutory Members had approved their appointment as StatutoryAuditors of the Company for a period of five years fr the conclusion of the said AGM tillthe conclusion of the AGM to be held for the Financial om Year 2023-24.
The requirement of seeking ratification by the Members for continuance of theirappointment has been withdrawn consequent to changes made by the Companies (Amendment)Act 2018 with effect from May 7 2018. Hence the Resolution seeking ratification of theMembers for their appointment is not being placed at the ensuing Annual General Meeting.
The Board Members and the Audit Committee at their Meetings held on May 24 2021 hadreviewed the performance and effectiveness of the audit process of Statutory Auditorsincluding their independence. The Boar Members and the Audit Committee expressed theirsatisfaction towards the same and d approved for their continuity as Statutory Auditors ofthe Company.
The Auditors' Report for 2020-21 does not contain any qualification reservation oradverse remarks and therefore there are no further explanations to be provided for in thisReport.
o Details with respect to fraud reported by Auditors
During the year under review no fraud was reported by Auditors.
o Secretarial Audit
P ursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and R emuneration of Managerial Personnel) Rules 2014 the Company hadappointed Keyul M. Dedhia & Associates Company Secretary in Practice (C.P. No. 8618)to undertake the Secretarial Audit of the
Company for the Financial Year 2020-21. The Secretarial Audit Report is annexedherewith as Annexure III.
There are no material qualifications reservations or adverse remarks contained in thesaid Report except c observations. The summary of the observations along with theCompany's explanation is ertain as under:
|Sr. No. Observation ||Company's Explanation |
|1. In the Extr General Meeting of the aordinary Members of Company held on October 5 2020 the Chairperson of Audit Committee Nomination and Remuneration Committee Stakeholders Relationship Committee of the Board of Directors of the Company was not present as required under the provisions of Secretarial Standard-2 on General Meetings. ||The Chairperson of Audit Committee Nomination and Remuneration Committee Stakeholders Relationship Committee of the Board of Directors of the Company could not remain present in the said Meeting on account of Covid-19 related restrictions. |
|2. Mr. Vir Merchant has been considered as en Independent Director however Mr. Viren Merchant has not registered himself online with the Indian Institute of Corporate Affairs at Manesar for inclusion of his name in the data bank of Independent Directors within the time pr escribed under the Companies Act 2013. Further in the Corporate Governance Report filed for the quarter and year ended March 31 2021 Mr. Viren Merchant has been shown as an Independent Director on the Board of Directors of the Company. ||Mr. Vir Merchant en could not complete online registration with the Indian Institute of C orporate Affairs at Manesar for inclusion of his name in the data bank of Independent Directors within the time prescribed under the Companies Act 2013 on account of technical issue. However the Company remains compliant with the requirement of Board composition as prescribed under SEBI (LODR) Regulations 2015 as on March 31 2021. |
|3. a. M s. Pallavi Navinchandra Mehta (mother- None of the persons against whom the said in-law of Mr Bhavesh Thakkar) Ms. Shefali . Bhupendra Mehta (paternal cousin of Ms. P riyanka Thakkar) Mr. Bhavesh R. Thakkar (Promoter); are r estrained from accessing the securities market and are further prohibited from buying selling or otherwise dealing in securities directly or indirectly or being associated with the securities market in any manner whatsoever for a period of 6 months from the date of Order; restrained from buying selling or dealing in the securities of ADF Foods Limited directly or indirectly in any manner whatsoever for a period of 1 year; shall jointly and severally disgorge the amount of unlawful gains and accordingly the amount deposited in the escrow account (along with the interest accrued so f shall be transferred to IPEF within ar) a period of 45 days. ||Order has been passed are involved in the Company's management at present nor hold directorship of the Company. Further Mr. Bha Thakkar and Ms. Priyanka Thakkar vesh did not hold any shares in the Company as on March 31 2021. Further no penalty/ stricture has been levied on the Company. |
| ||b. Mr. Navin Mansukhlal Mehta (father of Ms. P riyanka Thakkar) Mr. Abhishek Mehta Ms. Priyanka Thakkar (Promoter); are restrained from accessing the securities market and are further prohibited from buying selling or otherwise dealing in securities directly or indirectly or being associated with the securities market in any manner whatsoever for a period of 3 months from the date of Order. |
Keyul M. Dedhia & Associates have been re-appointed as the Secretarial Auditor ofthe Company for the F.Y. 2021-22. o Internal Audit
The Company had appointed RMJ & Associates LLP Chartered Accountants Mumbai(Registration No. AAM 0182) to conduct Internal Audit of Nasik Nadiad and MumbaiDivisions of the Company for the
Financial Year 2020-21.
RMJ & Associates LLP have been re-appointed as the Internal Auditors of theCompany for all divisions across the organization for the F.Y. 2021-22.
The Audit Committee of the Board of Directors Statutory Auditors and the Managementare periodically apprised of the Internal Audit findings and corrective actions taken.
o C ost Records and Audit
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.
V. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:
During the financial year under review no significant and material orders were passedby the Indian Regulators or Courts or Tribunals that would impact the going concern statusof the Company and its future operations.
W. LIS TING OF SHARES:
The C equity shares are listed on BSE Limited and the National Stock Exchange of IndiaLimited. ompany's The C ompany has duly paid the necessary listing fees with the concernedStock Exchange(s) for the financial year under review.
X. TE CHNOLOGY AND QUALITY:
Your C is committed to deliver highest quality of products by continuous improvement interms ompany of product quality and achieving customer satisfaction and delight.
Your Company has already obtained various Quality and Product Safety certificationssuch as the internationally recognized ISO 22000 certificate and GFSI-BRCGS (BritishRetail Consortium Brand Reputation Compliance Global Standard) Food Safety certificationfor its plants located at Nadiad Gujarat and Nasik Maharashtra.
Y. ENER GY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:
Information required under Section 134(3)(m) of the Companies Act 2013 read with theRule 8 of the Companies (Accounts) Rules 2014 is appended hereto and forms part of thisReport at Annexure VI.
Z. C ODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT:
The Directors and Members of Senior Management have affirmed compliance with the Codeof Conduct for Dir ectors and Senior Management. A declaration to this effect has beensigned by Mr. Bimal R. Thakkar
Chairman Managing Director & CEO and forms part of the Annual Report.
AA. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY ANDBANKRUPTCY CODE 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OFTHE FINANCIAL YEAR:
No application has been made under the Insolvency and Bankruptcy Code; hence therequirement to disclose the details of application made or any proceeding pending underthe Insolvency and Bankruptcy Code 2016 (31 of 2016) during the year alongwith theirstatus as at the end of the financial year is not applicable.
BB. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONETIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIALINSTITUTIONS ALONG WITH THE REASONS THEREOF:
The r equirement to disclose the details of difference between amount of the valuationdone at the time of one time settlement and the valuation done while taking loan from theBanks or Financial Institutions along with the reasons thereof is not applicable.
CC. DISCL OSURE REQUIREMENTS:
The v policies and codes adopted by the Company are stated in detail in the CorporateGovernance arious
Report of the Company which forms part of the Annual Report.
The C during the financial year complied with the applicable provisions of theSecretarial Standards ompany issued by the Institute of the Companies Secretaries ofIndia.
Your Directors wish to express their sincere appreciation of the excellent support andco-operation extended by the Company's shareholders customers bankers suppliers and allother stakeholders.
| ||For and on Behalf of the Board of Directors |
| ||Bimal R. Thakkar |
| ||Chairman Managing Director & CEO |
| ||DIN: 00087404 |
|Mumbai May 24 2021 || |
|Regd. Office: || |
|83/86 G.I.D.C. Industrial Estate Nadiad - 387 001 Gujarat || |
|Tel.: 0268-2551381/2 Fax: 0268-2565068; || |
|E-mail: email@example.com; Website: www.adf-foods.com || |
|CIN: L15400GJ1990PLC014265 || |