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Foods & Inns Ltd.

BSE: 507552 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE976E01023
BSE 00:00 | 24 Sep 64.55 -0.05
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NSE 05:30 | 01 Jan Foods & Inns Ltd
OPEN 64.60
PREVIOUS CLOSE 64.60
VOLUME 90265
52-Week high 82.00
52-Week low 44.50
P/E 37.75
Mkt Cap.(Rs cr) 325
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 64.60
CLOSE 64.60
VOLUME 90265
52-Week high 82.00
52-Week low 44.50
P/E 37.75
Mkt Cap.(Rs cr) 325
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Foods & Inns Ltd. (FOODSINNS) - Director Report

Company director report

Dear Members

The Directors present their report on the financial performance business andoperations of the Company for the year ended March 31 2020

1 . FINANCIAL RESULTS

The highlights of the financial performance for the year gone by and its comparisonwith previous year are given below:

(Rs In Lakhs)

Standalone Consolidated
2019-20 2018-19 2019-20 2018-19
( Rs ) (Rs) (Rs) (Rs)
Total Income 38892.28 34023.61 39614.25 34146.85
Total Income excluding Excise Duty 38892.28 34023.61 39614.25 34146.85
Profit Before Depreciation Finance and Tax (PBDIT) 3472.60 2631.93 3529.40 2626.68
inclusive of other Income
Finance Cost 1140.69 1320.43 1140.69 1320.67
Depreciation 1240.39 1150.76 1242.69 1152.34
Profit before share of profit/(loss) from Associate/ 1091.52 160.74 1146.02 153.66
Joint venture and exceptional items
Share of profit/(loss) from Associate/ Joint venture Nil Nil Nil Nil
Profit before exceptional items and tax 1091.52 160.74 1146.02 153.66
Exceptional items net(Loss)/ gain Nil 11681.17 Nil 11672.95
Tax Expenses (11.95) 904.96 37.05 904.96
Net Profit for the year 1103.47 10936.95 1108.97 10921.65
Appropriations
Transfer to General Reserves Nil Nil Nil Nil
Balance carried to Balance sheet 1103.47 10936.95 1108.97 10921.65

2. RESULTS OF OPERATIONS

As per the Standalone Financials for year ended on March 31 2020 the turnover of theCompany is Rs 384.29 crores as compared to Rs 337.38 crores for the year ended on March31 2020. The Company made a profit beforetaxof Rs 10.92 crores during theyear ended March 31 2020 against the profit before tax ofRs 1.61 crores during the yearended on March 31 2019.

As per the Consolidated Financials for year ended on March 31 2020 the turnover of theCompany is Rs 392.25 crores as compared to Rs 338.64 crores for the year ended onMarch 31 2019. The Company made a profit beforetaxof Rs 11.46 crores duringthe year ended March 31 2020 against the profit before tax ofRs 1.54 crores during theyear ended on March 31 2019.

The Company's exports during the year was Rs 203.07crores (Rs 208.06 crores) anddomestic sale was Rs 167.78 crores (Rs 115.73 crores).

This translates into a ratio of 54.76 % to 45.24% (64.26% to 35.74%) between exportsand domestic sales.

3. DIVIDEND

Your Board of Directors in its meeting held on May 30 2020 has recommended a FinalDividend of Rs 0.2 (i.e. 20 %) per equity share (last year Rs 0.20 per equity share) forthe financial year ended March 31 2020 amounting to Rs 100.68 lakhs as against Rs 100.68lakhs. The dividend payout is subject to approval of members at the ensuing Annual GeneralMeeting.

4. TRANSFER TO RESERVES

The Company proposes to transfer NIL to the general reserves out of the amountavailable for appropriation and an amount of NIL are proposed to be retained in the profitand loss account.

5. FIXED DEPOSITS

The Company had discontinued its Fixed Deposit scheme in the financial year 2014-15.The Company has repaid all its fixed deposit as on

March 31 2017 except deposit of Rs 20000 which remains unclaimed by 2 depositors.

6. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OFTHE FINANCIAL YEAR AND DATE OF REPORT

There are no material changes and commitments affecting the financial position of theCompany which have occurred after till date of this report.

7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

(i) The nexus between Indian Food Processing and Foods and Inns (F&I)

The COVID pandemic has been instrumental in demonstrating vulnerability across theglobe however one thing that it has shown is that the food industry remains resilient andalmost recession proof. Your company Foods and Inns (F&I) faced issues during thefirst few weeks of the lockdown however it was short lived and we were back intooperations by the first week of April 2020 in compliance with Covid19 guidelines. Weappreciate all our team member for the initiative taken to keep operation running withinstipulated guidelines. F&I believes that Food processing or the food industry isgoverned by few simple facts: a) India is the world's 2nd largest producer offruit and vegetables with 259 million MT however value addition or food processing is ameager 2% compared to China and the USA where value addition is close to 20% and 50%respectively highlighting an untapped opportunity b) Farm to fork in India is 7 handscompared to the USA which is 3 hands amplifying the opportunities in optimization ofsupply chain coupled with F&I's B2C offerings c) India has a young and hungrypopulation with a median age of 28 years amplifying the strong oncoming consumption storyd) India has 1.3 billion people who on average might have 2.5 meals per day leading to3.25 billion meals on a daily basis once again magnifying the robust consumption story andopportunity e) Indian agriculture forms 20% of our GDP 50% of employment and 70% of ourlandmass helping us become a fruit and vegetable garden for the rest of the world Based onthe themes above F&I has a strong conviction to: i) Aggressively penetrate thedomestic market where we have made significant progress over the last 3 years ii) Continueto grow our export channels by introducing new products and further penetrating marketssuch as USA and Africa. iii) Increasing our backward integration links with the solepurpose of getting more direct farmers under our belt so as to help them increase farmland productivity and new product development in a pesticide controlled nutritious andhealthy environment (see below for further explanation) Agriculture serves as the bedrockfor Food Processing it is imperative that our farmer links are strengthened year on yearto ensure we have sustainable fresh produce to make the best quality products for ourworldwide customers. F&I focus on backward integration includes: a) Focusing onsustainable yield improvements through scientific farming practices thereby reducing foodwaste water usage and harmful chemicals b) Improve farmer profitability whilst treatingthem as micro entrepreneurs thereby helping them increase their price realization orimplementing Minimum Support Prices (MSP) c) Work closely with the Government to bringvarious reforms such as beneficialduty structure to aid exports land reform subsidizedloans/interest waivers for farmers and processors pesticide awareness and encouragingagricultural based technology We have had 2 transformational reforms in the last 6 monthsthat will help F&I capture a wider market share a) Deregulation of the

APMC or mandi and b) DPIIT focus on the food processing industry specifically formango orange and potato where the government sees a $10 billion opportunity by 2030 Ourother value drivers core to our business growth include: i) Phased approach to focus onB2C via our organic and inorganic brands (branded spice and packaged frozen snacks) via adigital distribution approach ii) Leveraging technology and IOT to improve farmproductivity food safety traceability coupled with customer experience and datacollection iii) Sustainability pesticide control and healthy/immunity building packagedfoods This will not only drive future growth but deliver future value.

(ii) Expansion plan strategic outlook and long term sustainable value:

We have made significant strides in optimising our capacities and capex by focussing oncore areas of business growth such as a) frozen ready to eat to foods b) spray driedpowders and c) our immunity building/healthy B2C portfolio We have a strong strategicfocus which will drive long term value in the following ways:

Cashflow optimisation

Realignment of costs

Increasing plant productivity and controlled asset utilisation

New product development by increasing our farmer programmes

Leverage technology to streamline process whilst using digital platforms to publish ourproduct suite

Constantly collecting feedback and listening to our customers

Our capex cycle will unwind over the next 4 years gearing F&I to absorb the risingglobal consumption.

Our strategic outlook remains bullish with our unconditional focus on buildingcustomer trust and value. Our unique selling points sits with our professional yet veryexperienced management team coupled with our unwavering focus on providing a qualityproduct. Our professional team come with a lot diverse domestic and internationalexperience they remain very hands on with the market whilst assessing new opportunitiesregularly as India partakes in a steady growth curve with an agrarian focused Government.

(iii) Risk management:

Risk management is a key to the Company's strategy; it is not only used as a tool forrisk mitigation but to also assist in finding opportunities for continuous development.The Company is constantly evolving whilst developing a well-documented risk managementframework hence assisting in timely identification assessment and mitigation of risks.

The Company has constituted a Risk management committee which has been entrusted withresponsibility to assist the Board in overseeing the Company's risk management process andcontrol setting strategic plans and objectives for risk management review the Company'srisk appetite and strategy relating to key risk including market risk product risk.

The Company has adopted a risk management policy in accordance with the provisions ofthe Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

Few key risks identified by the Company are as under:

a) Substantial working capital due to characteristic nature of business cycle.

b) Limitation of plant utilization due to seasonal nature of business resulting inrestricted processing of variety of fruits.

c) Global warming resulting in untimely rains affecting the quality fruit availabilityand price.

iv) Internal control system and adequacy:

In order to ensure orderly and efficient conduct of business the Company has plannedto put more focused and necessary internal control systems using ERP in line with businessrequirements scale of operations and geographical spread. These systems will largelyinclude policies and procedures IT systems delegation of authority segregation ofduties and internal audit review framework.

In line with regulation the Company will continue to implement necessary internalfinancialcontrols and systems with regard to adherence to company's policies safeguardingof its assets prevention and detection of frauds and errors accuracy and completeness ofthe accounting records and timely preparation of reliable financial information.Additionally the company is building thorough Standard

Operating Procedures (SOPs) for the overall operations of the Company.

(v) Cautionary Statement:

The statements made and figures given in the various sections of "ManagementDiscussion and Analysis" are keeping in mind the company's objectives estimates andexpectations. The actual results may differ from those expected depending upon theeconomic conditions changes in Government regulations tax regimes and other external andinternal factors.

8. PURPOSE DRIVEN VALUE CREATION

F&I is gearing the businesses for purpose driven leadership. We think it isimperative to not only drive an organisation profitability also have a wider socialpurpose. A focus on the triple bottom line helps us maximise profit planet and people.After all a better tomorrow is one where humanity thrives We have used the 17 goals aspublished by the United Nations Sustainable Development Goals (UNSDGs) and integrated itunder 3 headings – Environment Social and Governance to ensure we formulate businessstrategies for a better world.

Environment principles usually monitor F&I's energy use waste pollution andnatural resource conservation. We ensure we are minimising our impact on the environmentand switching to renewable or clean energy where possible.

Social principles ensure F&I treat's its people fairly with no wage or race orgender discrimination along with ensuring our employees have good working conditions withhealth and safety being prioritised.

Governance being a key theme is of utmost focus ensuring F&I's minorityshareholders are well protected via various committees keeping us accountable andtransparent at all times. We will maintain the highest level of corporate governance andethics.

We maintain a formal policy ratified by our Board of Directors covering our variousinitiatives under Environment Social and Governance.

These initiatives are measured every 6 months via a Logic Model which dissects eachinitiative into inputs activities output outcomes and impact.

Sustainability is captured in its entirety as part of our efforts to becoming a purposedriven organisation driving long term sustainable value for all our stakeholders. We aimto do well and do good.

9. CORPORATE SOCIAL RESPONSIBILITY

The Company has always considered Corporate Social Responsibility (CSR) as avoluntary activity and a part of its long term vision of creating value for all itsstakeholders. Our Company believes that giving back to society is not a mandate butsomething which is integral to its beliefs. Accordingly CSR is an integral part of theCompany's business and is even promoted at the Board level.

The Company has contributed directly in urban and rural areas in sectors such aseducation water& sanitation promoting health care promoting holistic education andvalue development for children in government and low income aided schools.

Further details on the prescribed CSR spend under section 135 of the Companies Act2013 and the amount committed and distributed during the year under review are provided inthe Annual Report on CSR activities annexed as Annexure-1 to this report.

10. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING ANDOUTGO.

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act is annexed as Annexure-2to this report.

11. SUBSIDIARY COMPANIES

The Board of Directors in their meeting held on 14-08-2019 decided to wind up thewholly owned subsidiary Company FNI Asia PTE Ltd.

The Company has acquired the following during the year 99.99 % of the rights of thepartnership firm 2 2019.

Further a statement containing the salient features of the financial statements of oursubsidiaries in the prescribed Form AOC-1 is annexed as Annexure-3. 12.CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the Companies Act 2013 and SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 (the listing

Regulations) consolidated financial statements of the Company and its subsidiary hasbeen prepared for the year under report. The Audited Consolidated financial statementsalong with the auditors' report thereon forms part of this Annual report.

13. CORPORATE GOVERNANCE

Corporate Governance is about maximizing shareholders value legally ethically andsustainably. We believe sound corporate governance is critical to enhance and retaininvestor trust. Our Board exercises its fiduciary responsibilities in the widest sense ofterm.

Our Corporate governance report forms part of this Annual report.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

All Independent Directors have given declarations that they meet the criteria ofIndependence as laid down under Section 149 (7) of the Companies Act 2013 and SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015.

In accordance with the provisions of the Act Mr. Bhupendra Dalal retires by rotationand is eligible for re-appointment.

Further the details of Directors include remuneration independence performanceCommittees and Directors meeting are given in the Corporate Governance Report which isintegral part of this Annual and Board's Report.

During the year the board of directors had appointed Mr. Maneck Davar and Mrs. PallaviDhupelia as additional directors of the company w.e.f. September 30 2019.

15. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act 2013 the board of directors tothe best of their knowledge and ability confirm that;

In the preparation of the Annual Accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.

we have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of financialyear ended March 31 2020and of the profit of the Company for that year.

we have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this

Act for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities.

we have prepared the Annual Accounts on a going concern basis.

we have laid down internal financialcontrols to be followed by the Company and suchinternal financial controls are adequate and operating effectively.

we have devised proper system to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

16. INSURANCE

The assets of the Company are adequately insured against the loss of fire and otherrisks which are considered necessary by the management.

17 . BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirement as prescribed by Securities and Exchange Board of India("SEBI") (Listing Obligations and Disclosure Requirements) Regulation 2015. TheBoard and Nomination and Remuneration Committee reviewed the performance of the individualdirectors on the basis of the criteria such as the contribution of the individual directorto the Board and committee meeting like preparedness on the issue to be discussedmeaningful and constructive contribution and inputs in meetings.

The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.

In a separate meeting of Independent Directors performance of non Independentdirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of directors.

18. NUMBER OF MEETINGS OF THE BOARD

The Board has met Five times during the financial year the details of which aregiven in the Corporate Governance report.

19. INDEPENDENT DIRECTORS MEETING

The Independent Directors met once during the year under review without the attendanceof the Non – Independent Directors and members of the Management. The IndependentDirectors reviewed the performance of the Non Independent directors and the Board as awhole and the performance of the Chairman of the Company taking into account the views ofthe Directors and assessed the quality quantity and timeline of the flow of informationbetween the Company Management and the Board which is necessary for the Board toeffectively and reasonably perform their duties.

20. COMMITTEES OF THE BOARD

Currently the Board has five committees the audit committee the nomination andremuneration committee the stakeholder's relationship committee the corporate socialresponsibility committee and the risk management committee. A detailed note on thecomposition of the Board and its committees is provided in the Corporate Governance reportsection of this Annual Report.

21. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company's policy on director's appointment and remuneration and other mattersprovided in Section 178 (3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of the Director's Report.

22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements

23. RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions made by the Companyduring the year. Related Party Transactions Policy is posted on the website of the companyand is available athttps://www.foodsandinns.com/pdf/policies/related-party-transaction-policy.pdf.

The details of all the transactions with the related parties are disclosed in the Notesforming part of financial statements annexed to the financial statements for the year2019-20.

All the Related Party Transactions entered into by the Company are in ordinary courseof business and on an arm's length basis for which requisite approvals from the AuditCommittee and the Board of Directors were obtained. The transaction amount was notexceeding the applicable statutory limits and therefore no approvals from the shareholderswere required.

24. 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: i. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Sl. No Name of the director Total (Rs in lakhs) Ratio (times)
A) Median Employee Remuneration 3.33
B) Non Executive Directors Remuneration
1. Mr. Bhupendra Dalal 2.55 0.77
2. Mr. Milan Dalal 2.75 0.83
3. Mr. VinodKumar Beswal 2.55 0.77
4. Mr. Raymond Simkins 0.70 0.21
5. Mrs. Kamlini Maniar 1.25 0.38
6. Mr. Hormazdiyaar Vakil 2.75 0.83
7. Mr. Deepak Mohla* 0.10 0.03
8. Mr. Dinkarray Trivedi* 0.40 0.12
9. Mr. Maneck Davar* 0.90 0.27
10. Mrs. Pallavi Dhupelia* 0.75 0.23

* Since this information is for part of the year the same is not comparable. ii. Thepercentage increase/ (decrease) in remuneration of each director Chief Executive OfficerCompany Secretary if any in the financial year: Chief Executive Officer: 0.99%CompanySecretary: 27.66% Chief Financial Officer: -3.24% iii. The percentage increase in themedian remuneration of employees in the financial year: 2.51% iv. There were 325 permanentemployees on the payroll of the Company as on March 31 2020. v. Average percentageincrease already made in the salaries of employees other than the managerial personnel inthe last financialyear and its comparison with the percentage increase in the managerialremuneration and justification thereof and point out if there are any exceptionalcircumstances for increase in the managerial remuneration:

The Average increase in the remuneration of all employees was 9.78% in F.Y. 2020.

The average increase in the remuneration of both the managerial and non managerialpersonnel was determined based on the overall performance of the Company. Further theremuneration of the managerial personnel is based on the remuneration policy asrecommended by the Nomination & Remuneration Committee and approved by the Board ofDirectors. vi. It is hereby affirmed that the remuneration is as per the RemunerationPolicy of the Company.

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the year no significant or material orders were passed by any regulatorsagainst the Company other than that disclosed separately in the notes of the financialstatements.

26. EXTRACT OF ANNUAL RETURN- FORM NO MGT-9

The details forming part of the extract of then Annual Return in Form No MGT-9 isannexed as Annexure-5 to this report.

27. AUDITORS

27.1 Statutory Auditors

The Company's Auditors Messrs G M Kapadia & Co Chartered Accountants wereappointed as statutory auditors of the company from the conclusion of the Forty FifthAnnual General Meeting of the Company held on 13-09-2017 till the conclusion of the Fifty

Annual General Meeting to be held in the year 2022. They have confirmed theireligibility under section 141 of the Act and the rules framed thereunder forreappointment as Auditors of the Company as required under SEBI regulations the Auditorshave also confirmed that they hold a valid certificate issued by the peer review Board ofthe Institute of CharteredAccountants of India. There are no observations (including anyqualification reservation adverse remark or disclaimer) of the Auditors in their AuditReport that may call for any explanation from the Directors.

27.2. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. J.Y. Gupte Practising Company Secretary to undertake the Secretarial Auditof the Company. The Secretarial Audit Report is annexed as Annexure-6 to thisreport and does not contain any qualifications.

27.3 Internal Auditors

The company has appointed firms of chartered accountants as its internal auditors atthe locations of the factories situated at Chittor Bulsar Nashik Gonde and corporateoffice to evaluate the efficacy and adequacy of internal control systems compliances withoperating systems accounting procedures and policies. The Internal Auditors submittedtheir reports from time to time.

28. DISCLOSURE ON SEXUAL HARASSMENT OF WOMAN AT WORKPLACE

The Company has set up an Internal Complaints Committee for providing a redressalmechanism pertaining to sexual harassment of woman employees at workplace. There was nocase of sexual harassment reported during the year under review.

29 . UNCLAIMED DIVIDEND

The Company / RTA has been periodically intimating the concerned shareholdersrequesting them to encash their dividend before it becomes due for transfer to the IEPF.

There is no unclaimed dividend in respect of F.Y 2011-12 to be claimed by theshareholders of the Company. Hence no amount will be transferred to the IEPF for thefinancial year March 31 2020.

30. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of section 125 of the companies Act 2013 read with IEPFauthority (Accounting Audit Transfer and Refund) Rules 2016 (‘ the rules') allunpaid and unclaimed dividends are required to be transferred by the company to IEPFestablished by the Government of India after the completion of seven years. Furtheraccording to the said Rules the shares on which dividend remain unpaid or unclaimed bythe shareholders for seven consecutive years or more shall also be transferred to thedemat account of the IEPF authority. Accordingly the company has transferred thecorresponding shares to the demat account of the IEPF Authority as per the requirements ofthe IEPF rules for the dividend remained unpaid or unclaimed upto the financial year2009-10.

31. GREEN INITIATIVES

In the line with the ‘Green initiative' the Company has affected electronicdelivery of the Annual Report 2019-20 are sent to all members whose email addresses areregistered with the Company/ Depository Participant(s). For members who have notregistered their email addresses physical copies are sent.

32. ACKNOWLEDGEMENT

We thank our customers vendors investors bankers for their continued support duringthe year. We place on record our appreciation of the contribution made by our employees atall levels. Our consistent growth was made possible by their hard work cooperation andsupport.

On behalf of the Board
BHUPENDRA DALAL
Chairman
Mumbai August 20 2020 (DIN: 00061492)

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