To the members
Your Directors have a great pleasure in presenting the 28th
Annual Report together with the Standalone & Consolidated
Audited Financial Statements of your Company for the Financial Year ended March 312020.
(Rs. in Lakhs)
| || |
|Particulars ||FY 2019-20 ||FY 2018-19 |
|Net Sales ||267959.37 ||247946.42 |
|Other Operating Income ||151.26 ||288.51 |
|Total Revenue ||268110.63 ||248234.93 |
|Add: i) Other Income ||832.39 ||1109.60 |
|ii) Gain due to changes in fair value of derivative Liability ||29448.87 ||13109.85 |
|Total Income ||298391.89 ||262454.38 |
|Less: i) Total Expenditure ||254814.66 ||230036.03 |
|ii) Fair value loss on FVTPL equity securities ||51160.56 ||13109.85 |
|Pro t before Finance cost Depreciation ||(7583.33) ||19308.50 |
|Amortisation Expenses and distribution Tax strategies of || || |
|Less: i) Financecost ||2080.72 ||2068.64 |
|ii) Depreciation and ||4803.59 ||4371.04 |
|Amortisation Expenses || || |
|Pro t /(Loss) before tax ||(14467.64) ||12868.82 |
|Less: i) Provision for current Tax (including Taxation of earlier years) ||1850.47 ||4228.00 |
|ii) Provision for deferred taxation ||(317.67) ||296.63 |
|Pro t / (Loss) after tax ||(16000.44) ||8344.19 |
Performance of the Company
Your Company during the year under review earned revenue from operations (Gross) ofRs. 268111 Lakhs achieved an increase profit/(loss) 8.01% over the previousyear. The before Finance Cost depreciation & amortization and tax was of Rs.(7583) Lakhs as against Rs. 19308 Lakhs in the previous year. Your Company has compliedwith all the acts rules regulations and guidelines issued/prescribed by the SecuritiesExchange Board of India Reserve Bank of India Ministry of Corporate Affairs and otherstatutory authorities.
Transfer to General Reserves
Your Directors do not propose to transfer any amount to general reserves for thefinancial year ended March 31 2020.
Your Directors have pleasure in recommending a dividend of (50%) i.e.Rs. 2.50/- perequity share of face value of Rs. 5/- each for the financial year ended March 31 2020amounting to Rs. 1159.95 lakhs. The dividend payout is subject to approval of members atthe ensuing Annual General Meeting. The Register of Members and Share Transfer Books willremain closed from Friday August 21 2020 to Friday August 28 2020 (both daysinclusive) for the purpose of payment of dividend for the financial year ended March 312020. The Annual General Meeting is scheduled to be held on August 28 2020. The dividendpayout for the year under review has been finalized in accordance with the company'sdividend distribution policy and the Company's policy to pay sustainable dividend linkedto long term growth objectives of the Company to be met by internal cash accruals.
Dividend Distribution Policy
In terms of Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Company has formulated and adopted a Dividend Distribution Policywith the objective of providing clarity to its stakeholders During onthe profit the yearthe said Policy has been reviewed by the Board of Directors of the Company and hosted onthe website of the Company at https://www.heritagefoods.in /uploads/investors/pdf/15579009416hfl-dividend distribution policy.pdf
The paid up Equity Share Capital as on March 31 2020 stood at Rs. 231990000/-divided into 46398000 equity shares face value of Rs. 5/- each. During the year underreview the Company has not issued shares with differential voting rights nor has grantedany stock options or issued sweat equity share to its employees or directors. As on March31 2020 none of the Directors or the Company holds any instruments convertible intoequity shares of the Company.
Your Company has not accepted any deposits from the Directors/ Shareholders/Publicpursunt to Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 and there are no unpaid/unclaimed deposits nor amount of principalor interest on public deposits was outstanding as on the Balance Sheet date.
Buy Back of shares and disinvestment
The Company has not bought back any of its securities and there were no disinvestmentduring the Financial Year ended March 31 2020.
Particulars of Loans Guarantees or Investments
Loans guarantees and investments covered under Section 186 of the Companies Act 2013forms part of the notes to the standalone financial statements provided in this AnnualReport.
However the Board has given corporate guarantee as at 31st March 2020 of Rs. 2675/-Lakhs for the credit facilities availed by its wholly owned subsidiary Company namely M/s.Heritage Nutrivet Limited (the outstanding as on March 31 2020 was Rs. 2049/-Lakhs) and Rs. 2200/- Lakhs for the credit facilities availed by its joint venture Companynamely Heritage Novandie Foods
Private Limited (the outstanding as on March 31 2020 was Rs. 580/- Lakhs).
Particulars of Contract or Arrangements made with Related Parties
The particulars of contracts or arrangements with related parties as per Section 188 ofthe Companies Act 2013 and rules made thereof and as per the Related Party Transaction(RPT) policy the Company during the financial year ended March 31 2020 in prescribed FormAOC-2 is annexed to this Board's Report (Annexure-1). Further there are no materiallyunder significant review with Promoters Directors Key Managerial Personnels and theirrelatives which may have potential conflict with interest of the company at large. Therelated party transactions were placed before the audit committee as also to the Board attheir respective meetings for approval. All related party transactions entered during theyear were in the ordinary course of business and on arms length basis. The details of therelated party transactions during the year are part of the financial statements formingpart of this Annual Report.
Material changes and commitments affecting financial position between the end of thefinancial year and date of report
There are no material changes and commitments affecting financial position of thecompany which occurred after the end of the financial year i.e. March 31 2020 exceptthe impact COVID-19 pandemic on the business operations of the Company as follows
Impact of the CoVID-19 pandemic on the business;
The Company is categorised under "Essential Commodities" as per thenotification issued by Ministry of Home Affairs (MHA) Govt. of India for supply of Milkand Milk Products. The pandemic has not had any material adverse impact on the company'sbusiness although the sales of milk and value-added products have come down because ofthe lockdown. Transportation has also been impacted initially to some extent due toabsenteeism of drivers. All the milk supplied by farmers was procured and processed duringthe lockdown period. However the availability of raw materials and the supply chain ofthe company are not affected The Company has taken conscious decision to balanceuninterrupted operations and ensuring a safe working environment. To ensure this someteam members have been asked to report to work from their locations. The Company has alsomade necessary arrangements by obtaining passes from appropriate authorities as per theGuidelines issued by the Government of India and respective States for vehicles andindividuals and conducted proper sanitization of work place to ensure that staff were safeand comfortable at work place. The rest of the staff have been asked to report to theworkplace on alternate days based on their convenience thereby ensuring seamlessoperations reporting and controls. Your Company has complied the COVID-19 guidelineissued by the Securities Exchange Board of India. In view of the same and considering theMCA circulars your Company be convening the 28th AGM through VC/ OAVM withoutthe physical presence of the members at a common venue. However the deemed venue for theAGM shall be the Registered Office of the Company.
Schedule if any for restarting the operations;
Since the Company's operations are fully functional this question does not arise.
Steps taken to ensure smooth functioning of operations
The Company has put in place strict monitoring process for Covid-19 precautionsensuring the following
Sanitizing the premises and vehicles on regular basis
Maintenance of social distancing at all work places
Enforcing wearing of masks and regular cleaning of hands with soap water
Regular update of the health of all the employees and their families
Thermal scanning all the employees while entering the office premises
A sking all employees to install Aarogya Setu App
The Company has been regularly conducting awareness programs for all its employees. Allemployees of the Company have been communicated about the measures taken by the Companythrough mails and video conferencing calls which includes video-clip discussions from thedesk of Vice Chairperson & Managing Director and Executive Director of the Companyexplaining about the steps required to be taken by individuals to maintain safety.
Estimation of the future impact of CoVID-19 on its operations;
As explained above there has not been any material adverse impact on the Company'sperformance in terms of top-line and bottom-line. We expect further improvements as theCentral & State Governments are taking initiatives for opening of the trade andcommerce.
Capital and nancial resources
The Company does not plan to raise any capital in the near future and hence there is noimpact. Presently the Company doesn't need any additional funding from Banks/ FinancialInstitutions. However already sanctioned long-term loans and working capitals arehonoured by the Banks/ Financial Institutions without any additional rate of interest andcovenants
As mentioned earlier the profits are not adversely impacted. The transportationsegment which acts as an enabler is marginally impacted. As of now it can be concludedthat the Covid-19 impact on profits will not be material
The Company operates on cash-and-carry basis of its substantial business howevercollection from some of the debtors has been impacted marginally with some of thecustomers requested for a deferred payment schedule which the company keeping in mind thelong term relationship has accepted. The Company has been meeting all its financialobligations.
Ability to service debt and other assets / nancing arrangements
The Company has not availed moratorium for any of its installment payments and hasnever defaulted on any interest or loan installment and does not see any issue meetingfuture obligations too. None of the assets of the Company have been impacted or impairedby the Covid-19.
Internal nancial reporting and control
The Company has robust Internal Financial Control (IFC) system in place and all itslocations are well networked with S4 Hana SAP System. Even during the lockdown with acombination of staff working from the plants and/ offices etc. and all others workingfrom home all reporting systems worked seamlessly without any disruption
Being the Company categorized under "essential commodities" by CentralGovernment there has been less impact of supply chain inward-and-outward. The situationis although improving and we expect normal operations in this segment very soon.
Demand for its products/services
During the crisis there has been no impact on the supplies though there was a drop insales in absence of consumption out of home.
Existing contracts/agreements where non-ful llment of the obligations by any party willhave signi cant impact on the listed entity's business
The Company is in a position to honor all agreements with its vendors and consumers.The vendors from whom the Company avails product or services those are few in numbers andare not in any way impacted by the pandemic.
Repayment of Loan installments
The Company has been repaying all the loan instalments without any default. Even thoughReserve Bank of India allowed for moratorium/ deferment of instalment payments theCompany didn't opt for it.
Payments to Employee
During the period the Company has paid to all its working employees and none of theEmployees were terminated from the services. The Company also covered all its employees'under various insurance policies
Payments to Suppliers/Creditors
During this period the Company didn't default any of its payment to its suppliers/creditors.
Contributed to Covid-19
Your Company has contributed Rs. 10000000 (Rupees
One Crore only) towards fight against Covid-19 pandemic to the following State GovtRelief Fund/ Disaster Management Fund on 1st week of ApriI 2020 out of its CSRAmount of FY 2020-21
i. Chief Minister/Disaster Relief Fund Andhra Pradesh-Rs.30 Lakhs
ii. Chief Minister/Disaster Relief Fund Telangana-Rs.30 Lakhs
iii. Chief Minister/Disaster Relief Fund Karnataka-Rs.10 Lakhs
iv. Chief Minister/Disaster Relief Fund Tamil Nadu-Rs.10 Lakhs
v. Chief Minister/Disaster Relief Fund Maharashtra-Rs.10 Lakhs
vi. Chief Minister/ Disaster Relief Fund Delhi-Rs.10 Lakhs
Variation in market capitalization
| || |
As at March 31
|Increase / |
| ||2020 ||2019 ||(decrease) in % |
|Market capitalization ||988.97 ||2527.07 ||(60.86) |
|Rs. ( in Crore) || || || |
|Price earnings ratio ||(6.18) ||30.29 ||(122.98) |
Note: Data based on share prices quoted on BSE
Management Discussion and Analysis
In terms of the provisions of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 as amended from time to time the Management's Discussion and Analysisis provided in a separate section and forms an integral part of this Report.
The Board of Directors noted on the loss before tax incurred by the Company asreported in the Standalone & Consolidated Financial Statements for the Quarter andYear ended March
31 2020 Profit & Loss impact was due to changes in the fair value of investmentin equity shares of Future Retail Limited and fair value of corresponding derivativeliabilities as per the Agreement entered with them and in accordance with Ind ASaccounting principles as follows:
(Rs. in lakhs)
|Particulars || |
Consolidated Year Ended
| ||31.03.2020 ||31.03.2019 ||31.03.2020 ||31.03.2019 |
|before tax Adjustments: ||(14467.64) ||12868.82 ||(15337.72) ||12752.40 |
|Gain due to changes in the fair value of derivative liabilities ||29448.87 ||13109.85 ||29448.87 ||13109.85 |
|Loss due to changes in the FVTPL equity securities ||(51160.56) ||(13109.85) ||(51160.56) ||(13109.85) |
|Profit after above adjustments ||7244.05 ||12868.82 ||6373.97 ||12752.40 |
Your Company has not changed its nature of business during the period under review.Your Company has Two Divisions in operation in different States in India as on March 312020.
Indian Dairy Industry
India has been the leading producer and consumer of dairy products worldwide since 1998with a sustained growth in the availability of milk and milk products. Dairy activitiesform an essential part of the rural economy serving as an important source of employmentand income. India also has the largest bovine population in the world. However the milkproduction per animal is significantly low in our country as compared to the other majordairy producers country. Moreover nearly all of the dairy produce in India is consumeddomestically with the majority of it being sold as fluid milk. On account of this theIndian dairy industry holds tremendous potential for value-addition and overalldevelopment.
As of 2019-20 India is the leading milk producing country in the world accounting for21% of the global market share. The milk processing industry in India is expected toexpand at a compound annual growth rate (CAGR) of 16% between FY 2019-20 and FY 2023-24.
Indian Dairy Market Structure
India: Dairy Market Forecast (in Billion INR)
As per the research report by IMARC Group it is estimated that the Indian dairyindustry was worth a value of INR 10527 Billion in 2019 and it anticipates the market toreach a value of INR 21971 Billion by 2024 exhibiting a CAGR of around 16% during the2019-2024.
Organized & Unorganized Dairy Market in India
Being one of the primary dairy consumables in India the demand increase for milk inthe country is owed to the increasing population. As of FY 2019-20 ~81.1% of the Indiandairy and milk processing market was part of the unorganized sector.
State-wise segment insights:
Uttar Pradesh Rajasthan Madhya Pradesh Gujarat and Andhra Pradesh have been themajor milk producing states in India. Uttar Pradesh is the largest milk-producing Statebecause it is home to the highest buffalo population and the second-highest cattlepopulation in the country. The majority of the rural population in this state is engagedin livestock rearing and dairying. Gujarat has numerous cooperative dairy milk unions andprimary milk cooperative societies which play crucial role in the production of milk inthe state.
Value-added product wise insights:
Apart from milk the revenue of the Indian dairy and milk processing industry isgenerated from several value-added products such as curd paneer flavoured milk cheeseand yogurt. During the period
FY 2016 to FY 2020 the market size of butter is expected to grow by 14.5% curd by14.4% paneer by 14.1% and ghee by 14.1% among others.
Export: From India the export of dairy products has increased to countries likeBhutan Afghanistan Canada Egypt and the United Arab Emirates.
Key growth drivers of the market:
India's livestock sector is regarded as one of the largest in the world with a bovinepopulation of 299.90 Mn which comprises of cow's and buffalo's. The growth of the Indiandairy and milk processing market is ensured by the steady supply of milk which is theprimary raw material for this industry. The major challenge faced by the Dairy Industry isthe organization of the supply chain and logistics. The good part is that challenges arenothing but opportunities in disguise and in order to meet this challenge headonproactive steps need to be taken to empower farmers and provide a stronger supply chainfor them to rely on. Even though India is the largest producer of milk in the world theindustry itself is largely unorganized with only 28 percent of the total milk producedbeing channelized to countering anorganizedmanner. The first this would be to shiftthe focus to smaller dairy farms which sometimes lack veterinary facilities and basicnutritious fodder etc.
Increasing Demand for Milk and Value-Added Products
With an increase in the spending power of the population the demand for milk and othervalue-added dairy products is expected to increase in the coming years. In order to meetthe rising demand there needs to be a marked shift from the unorganized to the organizedsector. Moreover consumers now-a-days are not only hold greater buying power but alsohealth conscious regarding what they consume. There is thus a necessity to provide healthydairy products which can be readily consumed. This creates an opportunity for boutiquedairy farms to set up local operations providing fresh cow or buffalo milk to consumers.Over and above with people having less time these days the demand for premium value addedproducts such as probiotic yoghurt cheese milk shakes etc. are on the rise. Theseproducts not only have a higher margin but also have a longer shelf life which makes thesupply chain easier and cost effective.
The organised dairy sector is poised for healthy growth in coming years. Milkproduction CAGR of 5% over FY12-FY19 coupled with 5-6% inflation indicates 10% growth inrevenue terms. Organised players account for just 28% of the overall milk market andexpect their share to grow going forward. Also expect rising milk procurement prices to bepassed on by B2C players resulting in stable margins. Your Company is a market leader inthe curd segment and is now looking to expand its product basket by entering into thefastest growing product like Yoghurt through a Joint Venture Company. The motto of yourcompany is to empower farmers by doing the following activities
? F acilitating loans for the purchase of cattle through commercial banks/ NBFCs
??Facilitating cattle insurance;
??Conducting veterinary camps for animals at frequent intervals;
??Supply of high quality cattle feed and fodder seeds;
??Helping to source good productive animals;
??Supply of milk analyzers for ensuring accurate measurement of milk quality and
??Ensuring timely payment to farmers.
In its bid to become a pan India player your Company has expanded its collection anddistribution of products to 12 states in India covering South West and North India. Ithas almost 100% direct procurement network of 3 lakh dairy farmers across eight major milkproducing States namely Andhra Pradesh Telangana Karnataka Tamil Nadu MaharashtraRajasthan Uttar Pradesh and Haryana. The direct route of milk procurement enables it tomaintain quality. The company also operates 188 bulk coolers chilling plants and procures13.77 lakh liters of milk per day. It operates 16 own processing plants with installedmilk processing capacity of 25.70 lakh liters per day.
Your Company procures 13.77 lakh litres of milk daily from 3 lakh farmers across eightstates. The milk is directly procured from farmers which ensures greater consistency inmilk quality and consistency in supply. The company's installed processing capacity is26.70 lakh liters per day and chilling capacity is 20.51 Lakhs LPD. After processing 11.10lakh litres of milk is sold to about 15 lakh households on a daily basis and the remainingis converted into value added products and products are available across 11 states viz.Andhra Pradesh Telangana Karnataka Kerala Tamil Nadu Maharashtra Odisha NCR DelhiHaryana Uttar Pradesh and Uttarakhand.
The Board of Directors expressed their satisfaction about the way company has handledthe business during the period of COVID-19 outbreak. The initial period of the outbreaki.e. second half of March 2020 the sales of the Company was reduced by 20% theice-cream/Frozen Dessert sale was insignificant however other value added product saleshas reduced marginally subsequently it has gone up. During the period of COVID-19 outbreakthe procurement price of milk has come down and volum increased.
During the financial year 2019-20 Dairy Division has increased milk Chilling capacityby 0.50 lakh LPD by commissioning of 7 units which includes Bulk chilling units MiniChilling units and chilling centres.
Renewable Energy Division:
Your Company strongly recognizes the responsibility towards protecting the environment.As a forward-looking enterprise it is strongly committed to extending the Green'footprint.
Your Company is taking a lot of initiatives to improve efficiencies of the company.Renewable energy was the major focus area in the last ten years. Now your Company has10.39 MW of solar and wind power for captive consumption. Your Company is continuouslyinvesting in latest technologies and efficiencies to conserve energy. Renewable EnergyDivision of your Company had achieved the turnover of Rs. 939 Lakhs during the year underreview
Subsidiary / Associate Companies
Your Company as on March 31 2020 is having following subsidiary/associate/jointventure Companies:
Heritage Nutrivet Limited (CIN:U15400TG2008PLC062054)
A wholly owned Subsidiary Company operating with Animal
Nutrition and one of the leading Live Stock Feed & Feed
Supplements Company in Southern and Western India covering over 3 lakh farmers spreadacross five states viz. Andhra Pradesh Telangana Tamil Nadu Karnataka and Maharastra.Product quality is pivotal in endeavor towards "HEALTHY MILCH ANIMAL HAPPYFARMER"
Skil Raigam Power (India) Ltd (CIN:U40102TG2009PLC063671)
A associate Company is under process to setup a hydro power plant at Raigam inArunachal Pradesh. Your Company is having 44.83% of shareholding in this Company.
Heritage Novandie Foods Pvt Ltd (CIN:U74999TG2017PTC120860)
A 50:50 Joint Venture Company between Heritage Foods Limited (HFL) Hyderabad Indiaand NOVANIDE Maromme France with an object to manufacture and market various types ofYoghurt and other dairy products in India. Heritage Novandie
Foods Private Limited (HNFPL) is in the process of building its manufacturing facilityin Palghar District Maharashtra.
The details of transaction are available in the AOC-1 which is forming part of theAnnual Report. The gist of financial performance of the Subsidiary/Associate/Joint Venturecompanies is as follows.
Rs. in Lakhs
|Particulars || |
Heritage Nutrivet Ltd (Wholly Owned Subsidiary) year ended on
Skil Raigam Power (India) Ltd (Associate) year ended on
Heritage Novandie Foods Pvt Ltd (Joint Venture) year ended on
| ||31/03/2020 ||31/03/2019 ||31/03/2020 ||31/03/2019 ||31/03/2020 ||31/03/2019 |
|Total Income ||10458.63 ||7403.82 ||- ||- ||11.46 ||1.89 |
|Total Expenses ||10388.26 ||7367.03 ||2.21 ||2.09 ||151.54 ||78.59 |
|Profit/ (Loss) before tax ||70.37 ||36.78 ||(2.21) ||(2.09) ||(140.08) ||(76.70) |
|Tax expense Reversal of taxes of earlier years ||- ||- ||- ||- ||- ||- |
|Current tax expense ||8.88 ||31.26 ||- ||- ||- ||- |
|Deferred tax benefit ||(5.87) ||(89.58) ||- ||- ||- ||- |
|Profit/ (loss) for the year ||67.36 ||95.11 ||(2.21) ||(2.09) ||(140.08) ||(76.70) |
During the financial year under review your Company has not added/removed anysubsidiaries joint ventures or associate companies.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its Subsidiary Associate and Joint Venture areavailable on the website of your Company www.heritagefoods. in. These documents will alsobe available for inspection during the business hours of the Company at its registeredoffice in Hyderabad India.
Your Company continues the journey of delivering value to its consumers/customersthrough significant investments in quality programs. While sustaining existing externalbenchmarks and certifications your further enhanced the programs and initiatives to renewthe commitment to the culture of quality. Your Company adheres to international qualitystandard certifications such as ISO 22000:2005(FSMS) ISO 9001:2015(QMS) OHSAS18001:2007 ISO 14001:2015 (EMS) ISO 50001:2011(EnMS) and Halal Certification by JUHFMumbai.
Your Company has also received renewal of AgMark BIS and EIA certificates.
The Quality department of your Company handles large change management initiatives todrive quality and productivity improvements across the Company using various techniquesand updated technologies.
Your Company is working on new products development which is in line with the currentconsumer trend and our mission of brining health & happiness to every home. On thecommunication front company is focusing on social & digital media platforms as thesehave become an important source of seeking information leading to brand evaluation &adoption.
Awards & Recognitions
During the financial year 2019-20 your Company has received the following awards andrecognitions.
??The Company has been awarded as "Best Customer
Service Provider of the Year" organized by India Food
Safety Summit Awards 2019 in Delhi during December 2019
??The Company has been awarded as "Technology Innovator of the Year"organized by India Food Safety Summit Awards 2019 in Delhi during December 2019
??The Company has been awarded as "Most Integrated Company" at India DairyAward 2020 organized by Agriculture Today Group in Delhi during January 2020.
Human Resources and Industrial Relations
Your Company takes pride in the commitment competence and dedication shown by itsemployees in all areas of business. To ensure good human resources management yourCompany focused on all aspects of the employee lifecycle. This provides a holisticexperience for the employee as well. During their tenure at the Company employees aremotivated through various skill- development program engagement and volunteeringprograms. Your Company has a structured induction process at all locations and managementdevelopment programs to upgrade skills of managers. Objective appraisal systems based onKey Result Areas are in place for all employees. Your Company is committed to nurturingenhancing and retaining talent through superior Learning & Organizational Companyadded new certifications and
Development. This is a part of Corporate HR function and is a critical pillar tosupport the organization's growth and its sustainability in long run. The total strengthof your Company employees at the end of financial year 2019-20 was 3130
Your Company continuously strives for excellence in its Investor Relationship (IR)engagement with Domestic and International investors and has set up feedback mechanism tomeasure IR effectiveness. Structured conference calls and periodic investor/analystinteractions participation in investor conferences quarterly earnings calls and annualanalyst meet with the Executive Director President and Business Heads were organisedduring the year. Your Company always believes in leading from the front with emerging bestpractices in IR and building a relationship of mutual understanding with investor/analysts. Your Company ensures that relevant information about the Company is available toall the investors by uploading all such information at the Company's website and the StockExchanges where the shares of the company are listed.
Credit Rating of Securities
The details of the credit rating are as follows:
(a) Credit rating obtained in respect of debts : Heritage Foods Limited
(b) Name of the credit rating agency : Credit Rating Information Services of IndiaLimited (CRISIL) i. Long term Rating : CRISIL A/Stable ii. Short term Rating : CRISIL A1
(c) Date on which the credit rating was obtained : 17th Aprl 2020
(d) Revision in the credit rating : No
(e) Reasons provided by the rating agency for a downward revision : NA
Particulars of Employees and Related Disclosures
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. A statementcontaining the names of every employee employed throughout the financial year and inreceipt of remuneration of Rs. 102 lakh or more per annum or employed for part of the yearand in receipt of Rs. 8.50 lakh or more in a month under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from time totime are provided in Annexure 2A & Annexure 2B to this report.
Corporate governance is an ethically driven business process that is committed tovalues aimed at enhancing an organization's brand and reputation. This is ensured bytaking ethical business decisions and conducting business with a firm commitment tovalues while meeting stakeholders' expectations. It is imperative that your company'saffairs are managed in a fair and transparent manner. This is vital to gain and retain thetrust of the stakeholders.
In terms of Regulation 34 of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements)
Regulations 2015 (hereinafter "Listing Regulations") as amended from time totime a Report on Corporate Governance
Auditors along with Compliance Certificate of the Company forms integral part of thisAnnual Report.
Auditors' certificate on Corporate Governance
As required by SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 the auditor's certificate on corporate governance is forming part of the AnnualReport.
Your Company recognizes and embraces the importance of a diverse board for its success.Your Company believes that thought a truly diverse board will leverage differencesperspective knowledge skill and industry experience cultural and geographicalbackground age and gender which will help the Company retain its competitive advantage.The Board has adopted the Board Diversity Policy which sets out the approach to diversityof the Board of Directors. The Policy is available in the Company website i.e.www.heritagefoods.in > Investor > Policies.
Meetings of the Board
The Board met Eight (8) times during the financial year the details of which are givenin the Corporate Governance Report that forms part of this Annual Report. The interveninggap between any two meetings was within the period prescribed by the Companies Act 2013and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
Policy on Director's Appointment and Remuneration
The current policy is to have an appropriate mix of Executive and Non-executive &Independent and Women Directors to maintain the independence of the Board and separateits functions of governance and management. As on March 31 2020 the Board consists of 7members 2 of them are Executive/Whole-time directors 1 is Non-Executive Director 1 isNon-Executive Independent Woman Director and 3 are Non-Executive Independent Directors.The Board periodically evaluates the need for change in its composition and size. Thepolicy of your Company on directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters as provided under Subsection (3) of Section 178 of the
Companies Act 2013 and SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 was adopted by the Board. It is affirmed that the remuneration paid tothe directors is as per the terms laid out in the nomination and remuneration policy ofthe Company.
Declaration from Directors
Your Company has received necessary declaration from all directors stating that theyare not debarred or disqualified from being appointed or continuing as Directors ofcompanies by the Securities and Exchange Board of India Reserve Bank of India Ministryof Corporate Affairs or any such other Statutory Authority.
Declaration by Independent Directors
Your Company has received necessary declaration from each independent director statingthat they meet the criteria prescribed for independence under Section 149 of the CompaniesAct 2013 and Regulation 25 of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 and the Board has confirmed its veracity and taken the same on record.
As per the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended from time to time the Nominationand Remuneration Committee laid down criteria for performance evaluation of individualdirector(s) the board and its committee(s). Accordingly an annual evaluation was carriedout for the Board's performance its Committees and individual director(s). The Boardperformance evaluation is carried out through a structured questionnaire which provides aclear and valuable feedback for Board effectiveness and highlighting areas for furtherdevelopment. The following are some of the broad issues that are considered in performanceevaluation questionnaire
Criteria for evaluation of Board and its Committees:
??Ability to act on a fully informed basis in good faith with due diligence and inthe best interest of the company and the stakeholders.
??Optimum combination of knowledge skill experience and diversity on the Board aswell its Committees.
??Relationships and effective communication among the Board members.
??Effectiveness of individual non-executive and executive directors and Committees ofBoard.
??Quality of the discussions general information provided on the company and itsperformance papers and presentations to the Board.
??Risk management as well as processes for identifying and reviewing risks.
??Well- defined mandate and terms of reference of Committee.
Criteria for evaluation of Individual Directors:
??Attendance at Board as well as Committee Meetings
??Procurement of Information preparation for Board Meetings and value of contributionat meetings
??Relationships with fellow Board members the company secretary and senior managementand mutual trust and respect they stimulated within the Board.
??Keeping update with the latest developments in the areas of governance and financialreporting
??Willingness to devote time and effort to understand the company and its business
??Providing necessary guidance using their knowledge and experience in development ofcorporate strategy major plans of action risk policy and setting performanceobjectives.
??Independence exercised in taking decisions listening to views of others andmaintaining their views with resolute attitude
??Ability in assisting the Company in implementing the best corporate governancepractices.
??Capability in exercising independent judgement to tasks where there is potentialconflict of interest
??Commitment in fulfilling the director's obligations fiduciary responsibilities.
The Board of Directors received all evaluations from each Director including Board as awhole and it's committee based on the above criteria discussed various points and allpoints are satisfactory no further action is required. There were no actions pending fromthe previous year observations. The detailed format of Board evaluation is available inthe website of the Company i.e. https://www.heritagefoods.in/uploads/investors/pdf/15870145475Board_&_Director_Evaluation_ Framework.pdf
Training of Independent Directors
Every new independent director of the Board attends an orientation program. Tofamiliarize the new inductees with the strategy operations and functions of your Companythe Executive Directors/Senior Managerial Personnel make presentations to the inducteesabout the Company's strategy operations product and service offerings marketsorganization structure quality and risk management etc.
Dr. V Nagaraja Naidu (DIN: 00003730) Non-Executive Director of the Company retire byrotation and being eligible offers himself for reappointment at the ensuing Annual GeneralMeeting as per the provisions of Section 152 of the Companies Act 2013 and otherapplicable provisions if any read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 (including any statutory modifications(s) or re-enactment(s)thereof for the time being in force) and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015.
Retirements and Resignations
During the year none of the Directors retired or resigned from the Board.
Key Managerial Personnel
During the year under review the Company is having the following persons as KeyManagerial Personnel.
|Name of the Official ||DIN/M. No ||Designation |
|Mrs. N. Bhuvaneswari ||00003741 ||Vice Chairperson & Managing Director |
|Mrs. N. Brahmani ||02338940 ||Executive Director |
|Mr. A Prabhakara Naidu ||FCA 200974 ||Chief Financial Officer |
|Mr. Umakanta Barik ||FCS 6317 ||Company Secretary |
|Dr. M Sambasiva Rao || ||President |
Committees of the Board
Currently the Board has six committees i.e. Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee StakeholdersRelationship Committee Management Committee and Risk Management Committee. A detailednote on the Board and its committees is provided under the Corporate Governance Reportsection in this Annual Report. The composition of the committees and compliances as perthe applicable provisions of the Act and Rules are as follows:
|Name of the Committee ||Composition of the Committee ||Highlights of duties responsibilities and activities |
|Audit ||Mrs. Aparna Surabhi (C) ||All recommendations made by the audit committee during the year were |
|committee ||Mr. D Seetharamaiah (M) ||accepted by the Board. |
| ||Mr. Rajesh Thakur Ahuja (M) ||Reviewing with the management the quarterly financial statements |
| ||Mr. N Sri Vishnu Raju (M) ||before submission to the Board for approval. |
| ||Dr V Nagaraja Naidu (M) ||Approval or any subsequent modification of transactions of the Company with related parties. Reviewing with the management the performance of statutory auditors and internal auditors adequacy of internal control systems etc. |
|Nomination and ||Mr. N Sri Vishnu Raju (C) ||The committee oversees and administers executive compensation operating |
| ||Mr. D Seetharamaiah (M) ||under a written charter adopted by our Board of Directors. |
|Remuneration Committee ||Mr. Rajesh Thakur Ahuja (M) ||The nomination and remuneration committee has framed the nomination and remuneration policy. |
|Corporate Social Responsibility ||Mr. D Seetharamaiah (C) ||To formulate and recommend to the Board a Corporate Social Responsibility |
|Committee ||Mr. N Sri Vishnu Raju (M) ||(CSR) Policy indicating activities to be undertaken by the Company in compliance with provisions of the Companies Act 2013 and rules made there under. |
| ||Mrs. N Bhuvaneswari (M) ||To monitor the implementation of the CSR Policy of the Company from time to time |
|Stakeholders ||Dr. V Nagaraja Naidu (C) ||The committee reviews and ensures redressal of investor grievances. |
|Relationship ||Mr. D Seetharamaiah (M) ||The committee noted that all the grievances of the investors have been resolved during the year. |
|Committee ||Mr. N Sri Vishnu Raju (M) || |
| ||Mrs. N Bhuvaneswari (M) || |
|Risk Management Committee ||Mr. Rajesh Thakur Ahuja (C) ||The purpose of the committee is to assist the Board in fulfilling its corporate governance with regard to the identification evaluation & mitigation of operational strategic and environmental risks efficiently and effectively. |
| ||Mr. D Seetharamaiah (M) || |
| ||Mr. N Sri Vishnu Raju (M) || |
| ||Mrs. N Bhuvaneswari (M) ||The Company has developed and implemented a risk management framework that includes identification of elements of risk if any which in the opinion of the Board may threaten the existence of the Company. |
|Management ||Mr. D Seetharamaiah (C) ||Setting the strategic direction to guide and direct the activities of the organization; management of the organization and its activities; Ensuringtheeffective and Monitoring the activities of the organization to ensure they are in keeping with the founding principles objects and values. |
|Committee ||Mr. N Sri Vishnu Raju (M) || |
| ||Mrs. N Bhuvaneswari (M) || |
C- Chairperson M-Member
The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatedthe formulation of certain policies for all listed companies. All the corporate policiesare available in the Company website (www.heritagefoods.in/Corportate/ policies).
The policies are reviewed periodically by the Board and updated based on need and newcompliance requirement.
In addition to its Code of Conduct and Ethics key policies that have been adopted bythe Company are as follows:
|Name of the policy ||Brief description ||Web link |
|Whistleblower Policy (Policy on vigil mecha- nism) ||The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behaviour actual or suspected fraud or violation of the Company's code of conduct and ethics. It also provides for adequate safeguards against victimization of employees who availed the mechanism and also provides for direct access to the Chairperson of the Audit Committee. ||https://www.heritagefoods. in/uploads/investors/pdf/ 15578994930whistle-blow- er-policy.pdf |
|Insider Trading Policy and Code of Practices and Procedures for Fair ||The Company has adopted a Code of Conduct to Regulate Monitor & https://www.heritagefoods. |
| ||Report Trading by Insiders and Code of Practices and Procedures for in/uploads/investors/pd- |
| ||Fair Disclosure of Unpublished Price Sensitive Information as per the f/15578999759code-of-practic- |
|Disclosure of Unpub- lished Price Sensitive Information ||SEBI (Prohibition of Insider Trading) Regulation 2015 with a view to es.pdf regulate trading in securities by the Directors and Designated Persons while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed and other certain situations. All Board of Directors and the designated employees have confirmed compliance with the Code. |
|Nomination and Remuneration Policy ||This policy formulates the criteria for determining qualifications https://www.heritagefoods. competencies positive attributes and independence for the in/uploads/investors/ appointment of a director (executive / non-executive) and also pdf/15579001597board-diver- the criteria for determining the remuneration of the directors key sity- managerial personnel and senior management of the Company. remuneration-policy.pdf |
|Corporate Social Responsibility Policy ||The policy outlines the Company's strategy to bring about a positive https://www.heritagefoods. impact on Society through programs relating to hunger poverty in/uploads/investors/ pd- education healthcare environment etc. as per the provisions of the f/15578997634csr-policy.pdf Companies Act 2013. |
|Policy for Determining Material Subsidiaries ||The policy is used to determine the material subsidiaries and material https://www.heritagefoods. non-listed Indian subsidiaries of the Company and to provide the in/uploads/investors/ governance framework for them. pdf/15589549991policy-onde- termination- of-materialityevents.pdf |
|Related Party Transac- tion Policy ||The policy regulates all transactions between the Company and its https://www.heritagefoods. related parties in/uploads/investors/ pdf/15578998544rpt-policy.pdf |
|Policy on Preservation of Documents ||The policy deals with the preservation of corporate records of the https://www.heritagefoods. Company. in/uploads/investors/ pdf/15579003020 policy-on- preservation- of-doc.pdf |
|Archival Policy ||The policy deals with the retention and archival of corporate records https://www.heritagefoods. of the Company. in/uploads/investors/ pdf/ 15589549355archival-policy.pdf |
|Business Responsibility Policy ||This Policy endorses the Company's commitment to follow principles https://www.heritagefoods. and core elements in conducting its business as laid down in the in/uploads/investors/ National Voluntary Guidelines on Social Environmental and Economic pdf/15579004658hfl-br-policy. responsibilities of Business. pdf |
|Dividend Distribution Policy ||This Policy is to ensure the right balance between the quantum of https://www.heritagefoods. Dividend paid and amount of profits retained in the business for var- in/uploads/investors/pdf/ ious purposes. 15579009416hfl-dividenddistri - bution-policy.pdf |
|Policy on Determination of Materiality of Events ||The Policy is to determine materiality of events or information relat- https://www.heritagefoods. ing to the Company and to ensure timely and accurate disclosure on in/uploads/ investors/pd- all material matters concerning the Company. f/15589549991policy-ondeter- mination-of-materialityevents. pdf |
Auditor's & Auditor's Report
As per Section 139 of the Companies Act 2013 (the Act') read with the Companies(Audit and Auditors) Rules 2014 the Members of the Company at the 25th AnnualGeneral Meeting held in the year 2017 approved the appointment of M/s. Walker Chandiok
& Co. LLP Chartered Accountants (FRN 001076N/500013) as the Statutory Auditors ofthe Company for a term of 5 years i.e. from the conclusion of 25th AnnualGeneral Meeting till the conclusion of 30th Annual General Meeting of theCompany to be held in the year 2022.
Pursuant to amendments in Section 139 of the Companies Act 2013 the requirements toplace the matter relating to such appointment for ratification by members at every annualgeneral meeting has been omitted with effect from 7th May 2018. The Board of Directorsare empowered to fix the remuneration of the Statutory Auditor on yearly basis.
The Audit reports issued by M/s. Walker Chandiok & Co LLP Chartered AccountantsStatutory Auditors on the Company's standalone and consolidated financial statements forthe financial year ended 2019-20 is part of the Annual Report. There has been noqualification reservation or adverse remark in their Report.
In terms of the Section 148 of the Companies Act 2013 (the Act') read with Rule8 of the Companies (Accounts) Rules 2014 it is stated that the cost accounting recordsare made and maintained by the Company as specified by the Central Government undersub-section (1) of Section 148 of the Companies Act 2013. As your Company is dealing withSkimmed Milk Powder which require to maintain the cost records. Your Company hasmaintained all the required records as specified by the Central Government undersub-section (1) of Section 148 of the Companies Act 2013 and the appointment of CostAuditor is not applicable.
Secretarial Auditors and Secretarial Standards
The Secretarial Audit was carried out by Mrs. Savita Jyoti Partner M/s. Savita JyotiAssociates Practicing Company Secretary (CP No:1796 M.No.3738) Secunderabad - 500 094for the financial year 2019-20. The Report issued by the Secretarial Auditors is annexedas Annexure-3 and forms integral part of this Report. There has been no qualificationreservation or adverse remark in their Report.
In terms of Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Board of Directors appointedMrs. Savita Jyoti Partner M/s. Savita Jyoti Associates Practicing Company Secretary (CPNo:1796 M.No.3738) Secunderabad - 500 094 as the Secretarial Auditors of the Company inrelation to the financial year 2020-21. Your Company had received the written consent thatthe appointment will be in accordance with the applicable provisions of the Act and rulesframed thereunder. In terms of the amended SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015 the Company has obtained Jyoti theSecretarial Compliancecertificate Partner M/s. Savita Jyoti Associates Practicing Company Secretary (CPNo:1796 M.No.3738) Secunderabad - 500 094 which is annexed as Annexure-3(i) and formspart of the Annual Report and the same was also intimated to the Stock Exchanges where theshares of the Company are listed.
Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 Company has obtained acertificate from Mrs. Savita Jyoti Partner M/s. Savita Jyoti Associates PracticingCompany Secretary (CP No:1796 M.No.3738) Secunderabad - 500 094 which is annexed asAnnexure-3(ii) and forms part of the Annual Report and the same was also intimated to theStock Exchanges where the shares of the Company are listed. You Company also has obtaineda secretarial Audit Report of its wholly owned subsidiary company namely Heritage NutrivetLimited from Mrs. Khusboo Laxmi Bhagat Partner of M/s. KLB & Associates PracticingCompany Secretary (CP No:14703 M.No.9376) Hyderabad- 500016 which is annexed asAnnexure-3(iii) and forms part of the Annual Report.
The Director's have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia New Delhi and that such systems are adequate and operating effectively.
The Company has external firms of Chartered Accountants across India acting as internalauditors that review internal controls and operating systems and procedures as per thescope of there audit. The Internal Audit Reports of the company are reviewed by the AuditCommittee on monthly basis. The Internal Auditors across the company sends the quarterlyaudit observation to the Audit committee of the Board of Director and the same werepresented quarterly by the lead internal auditor of the Company namely Mr. JVenkateswarulu Partner of M/s. JVSL Associates Chartered Accountants Hyderabad. TheAudit Committee along with Statutory Auditors and the management of the Company were meetsall Internal Auditors of the Company once in a year to review the internal control and itsadequacy. The Board of Directors on recommendation of the Audit Committee hasappointed/re-appointed the Internal Auditors of your Company every year in compliance withSection 138 of the Act read with the Companies (Accounts)
Rules 2014. The detail list of Internal Auditors were provided in the corporateinformation section in the Annual Report.
Listing and Custodian Fees
The equity shares of your Company were listed at BSE Limited Mumbai and National StockExchange of India Limited Mumbai. The applicable annual listing fees were paid before thedue date. The annual custodian fees has also been paid to the depositories before the duedate.
Significant Material Orders Passed by the Regulators material orders passed by anyThere were no significant Regulators/Courts that would impact the going concern status ofthe Company and its future operations.
Extracts of Annual Return
An Extract of Annual Return in Form MGT-9 as per the provisions of Section 92 (3) andSection 134(3) of the Companies Act 2013 and Rule 12 of Companies (Management andAdministration) Rules 2014 as amended from time to time is provided in Annexure-4 tothis report. It is also made available in the website of the Company i.e.www.heritagefoods.in.
Internal financial control and its adequacy
The Board has inter alia reviewed the adequacy and effectiveness of the Company'sinternal financial controls relating to its financial statements.
The Board has discussed with the Management of the Company the major financial riskexposures and the steps taken by it to monitor and control such exposures overseen andreviewed the functioning of the Whistle Blower Mechanism and the findings in respect ofthe investigations conducted on frauds if any which were material in nature and theactions taken by the Management in this regard.
Your Company has adopted necessary policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors given bythe accuracy and completeness of the accounting records and the timely preparation offinancial information.
During the year such controls were tested and no reportable material weakness in thedesign or operation was observed by the consultant appointed by the Board of Directors andStatutory Auditors of the company During the year no fraud by the Company or on theCompany by its officers or employees has been notices and reported.
Internal Audit & Control Systems
Your Company has a well-defined and documented internal audit & control systemwhich is adequately monitored. Checks & balances and control systems have beenestablished to ensure that assets are safe guarded utilized with proper authorization andrecorded in the books of account. The Internal control systems are improved and modifiedcontinuously to meet the changes in business conditions statutory and accountingrequirements.
These are supplemented by internal audit of your Company carried out by reputed firmsof Chartered Accountants across the locations of the Company. Your Company has an AuditCommittee consisting of Four Non-Executive Independent Directors and one Non-ExecutiveDirector. The Audit Committee of the Board of Directors and Statutory Auditors areperiodically apprised of the internal audit findings and corrective actions taken. TheAudit Committee of the Board of Directors reviews the adequacy and effectiveness ofinternal control system and suggests improvements if any for strengthening them. YourCompany has a robust Management Information System which is an integral part of thecontrol mechanism.
Declaration as per Section 134(3)(ca) of the Companies Act 2013
During the year the statutory auditors and secretarial auditor have not reported anyinstances of frauds committed by or against the Company by its Directors/Officers/Employees to the Audit Committee or Board under section 143(12) of the Companies Act 2013and rules made thereof. Therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
CEO & CFO Certification
The Vice Chairperson & Managing Director and the Chief Financial Officer of theCompany has given annual certification on financial reporting and internal controls to theBoard in terms of Regulation 17(8) of the SEBI (Listing Obligation & DisclosureRequirements) Regulation 2015. Vice Chairperson & Managing Director and the ChiefFinancial Officer also give quarterly certification on financial results while placing thefinancial results before the Board in terms of Regulation 33(2) (a) of the SEBI (ListingObligation & Disclosure Requirements) the Regulation 2015. The annual certificateChairperson and Managing Director and the Chief Financial Officer forms part of this.Report Annual
Corporate Social Responsibility (CSR)
Your Company has been an early adopter of corporate social responsibility (CSR)initiatives. Along with sustained economic performance environmental and socialstewardship is a key factor for holistic business growth and has constituted a CorporateSocial Responsibility Committee ("CSR Committee") in accordance with Section 135of the Companies Act 2013. CSR activities as per the provisions of the Companies Act2013 and rules made thereof may be undertaken by the Company or through a registeredtrust or a registered society. The CSR Committee of the Board evaluated various options toimplement the CSR activities and decided to contribute the mandated CSR amount to the NTRMemorial Trust Hyderabad to carry out the activities such as promoting educationenhancing the vocational skill & supply of clean drinking water etc. as part of theCSR activities of the Company. As the NTR Memorial Trust is operating since 1997 towardsthe promoting and preventive of health care of the needy groups meeting the educationalneeds of underprivileged students advancing the concept of entrepreneurship andself-employment and offering support and relief during disasters and lot more otherinitiatives for the up-liftment of the backward and needy population in the society.
These projects are in accordance with Schedule VII of the Companies Act 2013 and theCompany's CSR Policy. The Report as required under Rule 9 of Companies (Corporate SocialResponsibility Policy) Rules 2014 on CSR activities is set out as Annexure-5 forming partof the Board's Report and the Policy has been uploaded on the Company's website at www.heritagefoods.in.
Heritage Farmer Welfare Trust (HFWT)
Apart from the mandatory CSR activities under the Companies Act 2013 your Companycontinues to voluntarily support the following social initiatives through Heritage FarmersWelfare Trust (HFWT).
??Veterinary care and cattle management practices through Heritage Mobile VeterinaryClinics (equipped with necessary tools and trained human resources) for providingdoor-step veterinary services to the Milch Animals and empowering cattle owners withadvanced technology and knowledge on best cattle management and feeding practices. TheMobile veterinary vans conduct free health camps in the needy villages.
??Extending Insurance coverage for accidental death of farmer members Incentive forfodder development & reward for Meritorious Students from farmer's families.
??The HFWT impact during the year for Mobile Veterinary clinic as follows:
|No of Cattles ||No of Cattle Health |
|Treated 163714 ||Camps Organized 2590 |
|NoofArti cial ||No of Video Films |
|Inseminations 1255 ||Shown 2486 |
Business Responsibility Report (BRR)
Pursuant to regulation 34(2)(f) of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 top 500 listed entities based on their marketcapitalisation as on 31st March every year are required to submit theirBusiness Responsibility Report (BRR) as a part of their Annual Report. The Annual Reportshall contain a Business Responsibility Report (BRR) describing the initiatives taken bythe Company from an environmental social and governance perspective. BRR has beendesigned as a tool to help companies understand the principles and core elements ofresponsible business practices and start implementing improvements which reflect theiradoption in the manner the company undertakes its business. In compliance with theregulation the Business Responsibility Report is annexed in Annexure-6 to the boardreport.
Energy Conservation Technology Absorption & Foreign Exchange Earnings & Outgo
TheparticularsasprescribedunderSub-section(3)(m)ofSection 134 of the Companies Act2013 read with the Companies (Accounts) Rules 2014 are provided in the Annexure-7 to theBoard Report.
Transfer of Un-Claimed Dividends and Shares
Pursuant to Section 124(5) of the Companies Act 2013 [Section 205C(2) of the CompaniesAct 1956] read with the Investor Education and Protection Fund (awareness and protectionof Investors) Rules 2001 as amended from time to time the unclaimed/unpaid dividendamount of 1113714/- (Eleven Lakhs Thirteen Thousand Seven Hundred Forteen Only) for theyear 2011-12 was transferred to the Investor Education and Protection Fund during thefinancial year 2019-20. In compliance with the provisions of Section 124 of the CompaniesAct 2013 the Company has transferred 20900 equity shares belongs to 29 shareholders ofthe company to Investor Education and Protection fund Authority (IEPF) on December 092019 of those shareholders who have not claimed the dividends for a continuous period of 7years.
Pursuant to Section 124(5) of the Companies Act 2013 [Section 205C (2) of theCompanies Act 1956] read with the Investor Education and Protection Fund (awareness andprotection of Investors) Rules 2001 as amended from time to time the unclaimed/unpaiddividend and the shares thereof pertaining for the financial year 2012-13 shall betransferred to the Investor Education and Protection Fund during the financial year2020-21.
The information in respect of unclaimed/unpaid dividend & shares thereto and thelast date for claiming the dividend are given below:
| || || || |
Unclaimed/Unpaid Dividend as on March 31 2020
|Financial year ended ||Date of Declaration of Dividend ||Last date for claiming unpaid Dividend ||Amount outstanding ||No of Shares |
| || || ||(Rs. in Rupees) || |
|2012-13 ||17-07-2013 ||19-08-2020 ||1302991 ||434330 |
|2013-14 ||26-09-2014 ||29-10-2021 ||2685012 ||895004 |
|2014-15 ||24-09-2015 ||28-10-2022 ||2300142 ||766714 |
|2015-16 ||19-08-2016 ||22-09-2023 ||1797153 ||599051 |
|2016-17 ||23-08-2017 ||25-09-2024 ||3465584 ||866396 |
|2017-18 ||30-08-2018 ||02-10-2025 ||1583812 ||791906 |
|2018-19 ||30-08-2019 ||02-10-2026 ||1510088 ||755044 |
The voting rights on the shares outstanding shall remain frozen till the rightful ownerof such shares claims the shares. The company sends reminders to the shareholdersconcerned to claim the unclaimed and unpaid dividends & shares thereto before they aretransferred to the IEPF Authority as per the applicable provisions.
The shareholders whose shares got transferred to IEPF Authority shall claim thedividends and shares from IEPF Authority by submitting an online application in theprescribed Form No. IEPF-5 available on the website www.iepf.gov.in and the procedureprescribed thereon. The frequented asked questions (FAQ) about claim is attached in theannual report for benefit the shareholders.
Mr. Umakanta Barik is the Nodal Officer who was appointed by the Company under theprovisions of IEPF.
Your Company have constituted a Risk Management Committee pursuant to Section 134 (3)(n) of the Companies Act 2013 & Regulation 21 of SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 which has been entrusted with theresponsibility to assist the Board in (a) Overseeing and approving the Company'senterprise wide risk management framework; and (b) Overseeing that all the risks that theorganization faces such as strategic financial credit market liquidity securityproperty Information Technology legal regulatory reputational and other risks havebeen identified and assessed and there is an adequate risk management infrastructure inplace capable of addressing those risks.
The Committee had formulated a Risk Management Policy for dealing with different kindsof risks which it faces in day to day operations of the Company. Risk Management Policy ofthe Company outlines different kinds of risks and risk mitigating measures to be adoptedby the Board. The Risk Management Procedure shall be reviewed by the Risk ManagementCommittee and Board of Directors on a half- yearly basis at the time of review ofFinancial Results of the Company.
The policy is available in the Company website: www.heritagefoods.in>Investor>policies
Policy on Sexual Harassment
The Company has always believed in providing a safe and harassment free workplace forevery women working in Company's premises through various interventions and practices.The Company has adopted policy and constituted the Internal Complaint Committee underPrevention of Sexual Harassment of Women at Workplace in accordance with the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Company has not received any complaints during the year. The Company regularlyconducts awareness programmes for its employees.
The following are the summary of sexual harassment complaints received and disposed offduring the
|Sl No Particulars ||Status of the No. of complaints received and disposed off |
|Number of complaints on 1 ||Nil |
|sexual harassment received Number of complaints disposed 2 ||Nil |
|off during the year Number of cases pending for 3 ||Not Applicable |
|more than ninety days Number of workshops or awareness programmes 4 against sexual harassment carried out ||The Company regularly conducts necessary awareness programmes for its employees |
|Nature of action taken by the 5 employer or district officer ||Not Applicable |
Vigil Mechanism policy
The Board of Directors of the Company had adopted the Whistle Blower Policy incompliance with the provisions of Section 177 of the Companies Act 2013 and Regulation 22of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015. A mechanism has been established for employees to report concernsabout unethical behaviour actual or suspected fraud or violation of Code of Conduct andEthics. It also provides for adequate safeguards against the victimization of employeeswho avail of the mechanism and allows direct access to the Chairperson of the AuditCommittee in exceptional cases. The Audit Committee reviews periodically the functioningof whistle blower mechanism. No complaint have been received during the Financial Yearended March 31 2020. No personnel have been denied access to the Audit Committee. Thedetails of said vigil mechanism are given in Corporate Governance Report which forms partof this Annual Report.
A copy of the Whistle Blower Policy is available in the company's website i.e.www.heritagefoods.In.
Indian Accounting Standards (Ind AS)
The Company has adopted Indian Accounting Standards (Ind AS) with effect from April 12017 pursuant to Ministry of Corporate Affairs' notification of the Companies (IndianAccounting Standards) Rules 2015. The standalone and consolidated financial statements ofthe Company forming part of the Annual Report have been prepared and presented inaccordance with all the material aspects of the Indian Accounting Standards (IndAS') as notified under section 133 of the Companies Act 2013 read with the Companies(Indian Accounting Standards) Rules 2015 (by Ministry of Corporate Affairs (MCA'))and relevant amendment rules issued thereafter and guidelines issued by the SecuritiesExchange Board of India ("SEBI").
Prevention of Insider Trading Code
As per SEBI (Prohibition of Insider Trading) Regulation 2015 as amended from time totime the Company has adopted a Code of Conduct for Prevention of Insider Trading. TheCompany has appointed Mr. Umakant Barik Company Secretary of the Company as ComplianceOfficer who is responsible for setting forth procedures and implementation of the code ofconduct for trading in Company's securities. During the year under review there has beendue compliance with the said code.
Director's Responsibility Statement as required under Section 134 (3)(c) & (5) ofthe Companies Act 2013.
The financial statements are prepared in accordance with the provision of Section 129of the Companies Act 2013 read with Schedule III of the Companies Act 2013 and the rulesmade thereof Ind-AS and Generally Accepted Accounting Principles (GAAP) under thehistorical cost convention on accrual basis except the sale proceeds received under RECMechanism of the Renewable Energy. GAAP comprises mandatory accounting standards asprescribed under Section 133 of the Companies Act 2013 (the Act') read with Rule 7of the Companies (Accounts) Rules 2014 the provisions of the Act and guidelines issuedby the Securities and Exchange Board of India (SEBI). There are no material departuresfrom prescribed accounting standards in the adoption of these standards.
The Board Directors to the best of their knowledge and understand confirm that:
??In the preparation of the annual accounts (Standalone & Consolidated) for thefinancial year 2019-20 the applicable accounting standards have been followed along withproper explanation relating to material departures.
??They 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 the financial year 2019-20 andof the profit and loss of the Company for that period.
??They have taken Proper and maintenance of adequate accounting records in accordancewith the provisions of the Companies Act 2013 for safeguarding the assets of the companyand for preventing and detecting fraud and other irregularities if any
??The annual accounts of the company have been prepared on a going concern basis.
??They have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively;and
??They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Acknowledgement and Appreciation
The Directors regrets the loss of life due to Covid-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic.
The Board takes this opportunity to thank all consumers customers farmers vendorsinvestors bankers and Statutory Authorities for their continued support during the year.The Board also wishes to place on record its sincere appreciation of the effort/contribution made by its employees at all levels for their hard work dedication andcommitment. The enthusiasm and unstinting efforts of the employees have enabled theCompany to remain an industry leader. The Company's consistent growth was made possible bytheir hard work solidarity cooperation and support and look forward to their continuedsupport in the future.