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NHC Foods Ltd.

BSE: 517554 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE141C01028
BSE 00:00 | 27 Mar 3.80 0.10
(2.70%)
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3.52

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3.80

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3.52

NSE 05:30 | 01 Jan NHC Foods Ltd
OPEN 3.52
PREVIOUS CLOSE 3.70
VOLUME 3072
52-Week high 7.89
52-Week low 3.20
P/E 2.48
Mkt Cap.(Rs cr) 5
Buy Price 3.80
Buy Qty 500.00
Sell Price 3.85
Sell Qty 5000.00
OPEN 3.52
CLOSE 3.70
VOLUME 3072
52-Week high 7.89
52-Week low 3.20
P/E 2.48
Mkt Cap.(Rs cr) 5
Buy Price 3.80
Buy Qty 500.00
Sell Price 3.85
Sell Qty 5000.00

NHC Foods Ltd. (NHCFOODS) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Annual Report for the Financial Year 2018-19together with the Audited Financial statements of the Company for the year ended 31stMarch 2019.

1. FINANCIAL HIGHLIGHTS:

(In Lacs)

March 31 2019 March 31 2018
Total Revenue 12531.21 8725.41
Total Expenditure 12418.60 8685.20
Profit Before Tax 112.61 40.21
Current Tax 21.46 19.63
Less: MAT Receivable 0.65
Less: Tax Paid/adjustment of earlier years
Less: Deferred Tax (38.71) (2.96)
Profit After Tax 130.51 23.54

Performance:

It needs to be noted that the performance of the company has been improved in FinancialYear 2018-2019 as compared to last Financial Year 2017-2018. The Total Revenue of thecompany increased in March 2019 to Rs. 12531.21 Lacs as compared to previous year revenuewhich amounted to Rs. 8725.41 Lacs. Also Profit after Tax of the company increased to Rs.130.51 Lacs as compared to Profit after Tax in previous year which is Rs. 23.54 Lacs.

2. Transfer to Reserves:

Your Directors do not propose to transfer any amount to the general reserve and entireamount of profit for the year forms part of the ‘Retained Earnings'.

3. Dividend:

In order to conserve the resources for the future expansion plan of the Company underimplementation your directors do not recommend any dividend for the year under thereview.

4. Transfer of unclaimed dividend to investor education and protection fund:

Since there was no Dividend declared and paid last year the provisions of Section 125of the Companies Act 2013 does not apply.

5. Corporate Governance

A Report on Corporate Governance in terms of Regulation 34 of the Listing Regulationsalong with a Certificate from Practising Company Secretary certifying compliance ofconditions of Corporate Governance enumerated in the Listing Regulations is presented ina separate section forming part of this Annual Report.

6. Management Discussion and Analysis Report

Management Discussion and Analysis as stipulated under Listing Regulations is presentedin a separate section forming part of this Annual Report. It speaks about overall industrystructure global and domestic economic scenarios developments in business operationsinternal controls and their adequacy risk management systems and other materialdevelopments.

7. Board Meetings:

11 meetings of the Board of Directors were held during the financial year. The detailsof the meetings of the Board of Directors of the Company conveyed during the financialyear 2018-19 are given in the Corporate Governance Report which forms part of AnnualReport. The details of attendance of the Directors in the Board Meetings and itsCommittees during the year under review are stated in the Corporate Governance Report.

8. Composition of Audit Committee:

The Board has constituted the Audit Committee and all the recommendations given byAudit Committee during Financial Year 2018-2019 were accepted by the Board. Furtherdetails on the Audit Committee and other Committees of the Board are given in theCorporate Governance Report which forms a part of this Annual Report.

9. Directors and Key Manangerial Personnel:

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Apoorva Shah (DIN:00573184) Chairman & ManagingDirector of the Company retires by rotation at ensuing Annual General Meeting and beingeligible offer himself for reappointment. The Board recommends his re-appointment asDirector liable to retire by rotation at the ensuing Annual General Meeting.

The Company has received necessary declarations from all the Independent Directorsconfirming that they meet the criteria of independence as prescribed both under the Actand the Listing Regulations.

Changes in Board of Director:

Name DIN Designation Date of Appointment Date of Cessation
Apoorva Shah 00573184 Managing Director 13-11-2018
Alpa Shah 00573190 Whole Time Director 14-02-2019
*Hemant Topiwala 00355690 Independent Director 07-10-2015 12-07-2019
*Rajiv Bhatt 02320813 Independent Director 30-08-2008 12-07-2019
Monika Singhania 07950196 Independent Director 30-09-2017
**Manish Vyas 08502223 Additional Director 12-07-2019
**Neha Kariwala 08502169 Additional Director 12-07-2019

Note:

*Mr. Hemant Topiwala has resigned as an Independent Director of the company witheffect from 12-07-2019 *Mr. Rajiv Bhatt has resigned as an Independent Director ofthe company with effect from 12-07-2019.

** Mr. Manish Vyas was appointed as an Additional Director of the company witheffect from 12-07-2019.

** Ms. Neha Kariwala was appointed as an Additional Director of the company witheffect from 12-07-2019.

Pursuant to provisions of Section 203 of the Act and the Rules made there underfollowing are the Key Managerial Personnel (KMP) of the Company:

1. Mr. Apoorva Shah Chairman & Managing Director
2. Mrs. Alpa Shah Whole – time Director
3. Ms. Krina Mehta Company Secretary & Compliance Officer
4. Mr. Awadeshkumar Kannaujia Chief Financial Officer

10. Shareholders and investors

Your Company regularly interacts with its shareholders and investors through resultannouncements annual report media releases Company's website and subject specificcommunications. The Annual General Meeting gives the shareholders an opportunity to engagedirectly with the Board of Directors and Management. During this meeting the Boardengages with shareholders and answer their queries on varied subjects. Your Company has adesignated e-mail address for shareholders. The Secretarial department regularly engageswith the shareholders to resolve queries grievances if any and provides guidance to theshareholders for any company related matters.

11. ISSUE OF SHARES

The Company during the year under review has not issued any SWEAT equity shares orshares with differential rights or under Employee stock option scheme nor did it buy backany of its shares.

12. Performance Evaluation of the Board Its Committees and Individual Directors:

The Board of Directors of the Company is committed to assessing its own performance asa Board in order to identify its strengths and areas in which it may improve itsfunctioning. To that end the Nomination and Remuneration Committee has establishedprocesses for performance evaluation of Independent Directors the Board and Committees ofthe Board.

Pursuant to the provisions of the Act and the Listing Regulations the Board hascarried out an annual evaluation of its own performance performance of its Committees aswell as the Directors individually. Details of the evaluation mechanism are provided inthe Corporate Governance Report.

Evaluation of Committees was based on criteria such as adequate independence of eachCommittee frequency of meetings and time allocated for discussions at meetingsfunctioning of Board Committees and effectiveness of its advice/recommendation to theBoard etc.

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Policy can also be accessed on Company's website athttp://www.nhcgroup.com/wp-content/uploads/2015/01/Nomination-and-Remuneration-Policy.pdf

13. Directors' Responsibility Statement:

Pursuant to provisions of Section 134(3)(c) and Section 134(5) of the Act yourDirectors state that:

a) in the preparation of the annual accounts for the year ended 31st March2019 the applicable accounting standards read with requirements set out under ScheduleIII to the Act have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as of 31st March 2019 and ofthe profit of the Company for the year 1st April 2018 to 31st March2019;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a ‘going concern' basis;

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

14. Contracts or Arrangements with Related Parties:

All contracts and arrangements with related parties entered by the Company during thefinancial year were in the ordinary course of business and on an arm's length basis.

During the year the Company had not entered into any contract or arrangement withrelated parties which could be considered ‘material' in terms of the Company'sRelated Party Transactions Policy. Accordingly there are no transactions that arerequired to be reported in Form AOC-2. The same provided in Annexure 1.

15. Subsidiary Companies:

The Company does not have any Subsidiary Company.

16. Statutory Auditors:

The Board of Directors of the company has appointed M/s. JMK & Co. CharteredAccountants (Firm Registration No. 120459W) as Statutory Auditor subject to approval ofShareholders in the forthcoming Annual General Meeting to fill the casual vacancy causedby Resignation of M/s. GMJ & Co. Chartered Accountant due to the reason of Audit Feesbeing not commensurate with their time & efforts involved in carrying out StatutoryAudit of our Company which has been relocated from Santacruz Mumbai to Turbhe NaviMumbai.

17. AUDITORS OBSERVATIONS:

The Auditors Report for the Financial Year 2018-2019 does not contain anyqualification reservation or adverse remark. The Auditors Report is enclosed with theFinancial Statements in this Annual Report.

The Secretarial Audit Report for the Financial Year 2018-2019 does not contain anyqualification reservation or adverse remark. The Secretarial Audit Report is enclosed asAnnexure II to the Board's Report in this Annual Report.

18. Employee Relations:

At NHC Foods we consider our employees as the most valuable resource and ensurestrategic alignment of Human Resource practices to business priorities and objectives. Ourconstant endeavour is to invest in people and people processes to improve human capitalfor the organisation and service delivery to our customers. Attracting developing andretaining the right talent will continue to be a key strategic imperative and theorganisation continues its undivided attention towards that. We would like to take thisopportunity to express appreciation for the hard work and commitment of the employees ofthe Company and look forward to their continued contribution.

19. Secretarial Auditors:

As required under Section 204 of the companies Act 2013 and Rules there under theBoard of Directors has appointed Mr. Dinesh Kumar Deora Practising Company Secretary asSecretarial Auditor to conduct the Secretarial Audit of the Company for the Financial Year2019-20.

20. Annual Return

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management & Administration) Rules 2014 is furnished in Annexure4 and is attached to this report.

21. Internal Financial Controls:

The Company has in placed adequate Internal Financial Controls commensurate with thesize scale and complexity of its operations. During the year such controls were testedand the Company has in all material respects maintained adequate Internal FinancialControls over financial reporting as of 31st March 2019 for ensuring theorderly and efficient conduct of its business adherence to Company's policiessafeguarding assets of the Company Prevention and Detection of Frauds and ErrorsAccuracy and Completeness of the Accounting Records and timely preparation of ReliableFinancial information.

22. Vigil Mechanism / Whistle Blower Policy:

The Company has established a vigil mechanism and formulated the Whistle Blower Policy(WB) to deal with instances of fraud and mismanagement if any. During the year underreview no personnel has been denied access to the audit committee. The Company has adopteda formal Vigil Mechanism/ Whistle-blower policy. The approved policy is available on theCompany's website www.nhcgroup.com

23. Disclosure Regarding Prevention of Sexual Harassment:

The Company is committed to maintaining a productive environment for all its employeesat various levels in the organisation free of sexual harassment and discrimination on thebasis of gender. The Company has framed a policy on Prevention of Sexual Harassment inline with the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013.The Company has also set up "Prevention ofSexual Harassment Committee" (‘the Committee') to redress the Complaintsreceived regarding sexual harassment which has formalised a free and fair enquiry processwith clear timelines. There were no complaints pending for the Redressal at the beginningof the year and no complaints received during the financial year.

24. Share Capital

The paid – up Equity Share Capital as on 31st March 2019 was Rs.118550000. During the year under the review the Company has not issued any shares. TheCompany has not issued shares with differential voting rights. It has neither issuedemployee stock options nor Sweat Equity Shares and does not have any scheme to fund itsemployees to purchase the shares of the Company.

25. Material changes and commitments:

There were no material changes and commitments that occurred subsequent to the end ofthe financial year till the date of this report which affects the financial position ofthe Company.

26. CHANGE IN NATURE OF BUSINESS:

There has no change in the nature of business of the Company. Your Company continues tobe one of the leading foods processing Company.

27. 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:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year 2018-19:

Name of the directors Ratio to Median Remuneration
Executive Directors
Mr. Apoorva Shah 18.34
Mrs. Alpa Shah 18.34
Non - Executive Directors
* Mr. Rajiv Bhatt NA
* Mr. Hemant Topiwala NA
Mrs. Monika Singhania NA

b. The percentage increase in remuneration of each director chief financial officerCompany secretary in the financial year 2018-19:

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
Mr. Apoorva Shah NIL
Mrs. Alpa Shah NIL
Mr. Ashok Kamath NIL
Mr. Awadheshkumar Kanuajia NIL

c. The percentage increase in the median remuneration of employees in the financialyear: 33.40%

d. The number of permanent employees on the rolls of Company: 27

e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration NIL.

The statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in a separate annexure forming part of this report.Further the report and the accounts are being sent to the members excluding the aforesaidannexure. In terms of Section 136 of the Act the said annexure is open for inspection atthe Registered Office of the Company. Any shareholder interested in obtaining a copy ofthe same may write to the Company Secretary.

28. Company's policy relating to Director's appointment Payment of remuneration anddischarge of their duties.

The company's policy relating to appointment of Directors Payment of ManagerialRemuneration Directors Qualification and other related matter as provided under section178(3) of the Companies Act 2013 is available on website of the company.

We affirm that the remuneration paid to the Directors is as per the term laid out inthe Nomination & Remuneration Policy of the company.

29. Loans Guarantees or Investments:

There were no Loans Guarantees and Investments made by company under Section 186 ofthe Companies Act 2013 during the year under review and hence said provision is notapplicable.

30. Particulars of Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo:

The particulars of conservation of energy technology absorption and foreign exchangeearnings and outgo as prescribed under Section 134(3)(m) of the Act read with Rule 8 ofThe Companies (Accounts) Rules 2014 are given as Annexure 3 to this Report.

31. Corporate Social Responsibility:

The company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said Provision of Section 135 of the Companies Act 2013 is notapplicable to the company.

32. Board Effectiveness:

1. Familiarization Programme for the Independent Directors:

In compliance with the requirements of SEBI Regulations the Company has put in place afamiliarization programme for Independent Directors to familiarize them with their rolesrights and responsibility as Directors working of the Company nature of the industry inwhich the Company operates business model etc. The Company operates business model etc.The same is also available on the website of the Company and can be accessed by web linkhttp://www.nhcgroup.com/wp-content/uploads/2015/01/ Familiarization-Program - forIndependent - Directors - of - NHC Foods Limited.pdf

33. RISK MANAGEMENT:

For your Company Risk Management is an integral and important component of CorporateGovernance. Your Company believes that a robust Risk Management ensures adequate controlsand monitoring mechanisms for a smooth and efficient running of the business. A risk awareorganization is better equipped to maximize the shareholder value.

The key cornerstones of your Company's Risk Management Framework are:

1. Periodic assessment and prioritization of risks that affect the business of yourCompany;

2. Development and deployment of risk mitigation plans to reduce the vulnerability tothe prioritized risks;

3. Focus on both the results and efforts required to mitigate the risks;

4. Defined review and monitoring mechanism wherein the functional teams the topmanagement and the Board review the progress of the mitigation plans;

5. Embedding of the Risk Management processes in significant decisions such as largecapital expenditures mergers acquisitions and corporate restructuring

6. Wherever applicable and feasible defining the risk appetite and install adequateinternal controls to ensure that the limits are adhered to.

34. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no Dividend declared and paid last year the provisions of Section 125of the Companies Act 2013 does not apply.

35. CODE OF CONDUCT:

The Company has laid down and adopted a Code of Conduct for its Directors and SeniorManagement Personnel which is also available on the Company's website:http://www.nhcgroup.com/corporategovernance-. The Company has received confirmation fromall Directors as well as Senior Management Personnel regarding compliance with the Code ofConduct during the year under review as required under Regulation 26(3) of the ListingRegulations. Additionally all Independent Directors of the Company shall be bound byduties of Independent Directors as set out in the Companies Act 2013 read with theSchedule and Rules there under. Pursuant to Schedule V(D) of the Listing Regulations adeclaration signed by the Managing Director of the Company to this effect is attached atthe end of this report.

36. Trade Relations:

Your Directors wish to record appreciation of the continued unstinted support andco–operation from its retailers stockists supplier of goods/services clearing andforwarding agents and all other associated with it. Your Company will continue to buildand maintain a strong association with its business partners.

37. HEALTH SAFETY AND ENVIRONMENT PROTECTION:

The Company has complied with all the applicable environmental law and labour laws. TheCompany has been complying with the relevant laws and has been taking all necessarymeasures to protect the environment and maximize worker protection and safety.

38. LISTING OF SHARES:

The shares of the Company are listed on BSE Ltd.

The Company has regularly paid the Annual Listing Fees to the respective StockExchanges. Annual Custody / Issuer fee for the Financial Year 2019-2020 has been paid bythe Company to National Securities Depositories Limited and Central Depository ServicesLimited.

39. General:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

a) The Company has not accepted any deposits from the public or otherwise in terms ofSection 73 of the Act read with Companies (Acceptance of Deposit) Rules 2014 and as suchno amount on account of principal or interest on deposits from public was outstanding ason the date of the Balance Sheet.

b) No significant or material orders were passed by the Regulators Courts or Tribunalswhich impact the going concern status and Company's operations in future.

c) The Auditors have not reported any matter under Section 143(12) of the Acttherefore no detail is required to be disclosed under Section 134(3)(ca) of the Act

40. ACKNOWLEDGEMENTS:

The Board places on record its appreciation for the continued co-operation and supportextended to the Company by customers vendors regulators banks financial institutionsrating agencies stock exchanges and depositories auditors legal advisors consultantsbusiness associates and all the employees with whose help cooperation and hard work theCompany is able to achieve the results.

The Board deeply acknowledges the trust and confidence placed by the consumers of theCompany and all its shareholders.

By the order of the Board of Directors
For NHC FOODS LIMITED
Apoorva Shah
(Chairman & Managing Director)
Place: Mumbai Din : 00573184
Date: 01-08-2019

Annexure 1

Form No. AOC-2

(Pursuant to Clause (h) of Sub-Section (3) of Section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts / arrangements entered into by theCompany with related parties referred to in sub-Section (1) of Section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto:

1. Details of contracts or arrangements or transactions not at arm's lengthbasis:

NHC Foods Limited (the Company) has not entered into any contract /arrangement/transaction with its related parties which is not in ordinary course of business or atarm's length basis or at arm's length during Financial Year 2018-2019. The Company haslaid down policies and processes/procedures so as to ensure compliance to the subjectSection in the Companies Act 2013 ("Act") and the corresponding Rules. Inaddition the process goes through internal and external checking followed by quarterlyreporting to the Audit Committee.

(a) Name(s) of the related party and nature of relationship: Not Applicable

(b) Nature of contracts / arrangements / transactions: Not Applicable

(c) Duration of the contracts / arrangements / transactions: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the valueif any: Not Applicable

(e) Justification for entering into such contracts or arrangements or transactions: NotApplicable

(f) Date(s) of approval by the Board: Not Applicable

(g) Amount paid as advances if any: Not Applicable

(h) Date on which the special resolution was passed in general meeting as requiredunder first proviso to Section 188: Not Applicable

2. Details of material contracts or arrangement or transactions at arm's lengthbasis:

a. Name(s) of the related party and nature of relationship: Not Applicable

b. Nature of contracts / arrangements / transactions: Not Applicable c. Duration of thecontracts / arrangements / transactions: Not Applicable

d. Salient terms of the contracts or arrangements or transactions including the valueif any: Not Applicable

e. Date(s) of approval by the Board if any: Not Applicable

f. Amount paid as advances if any: None

By the order of the Board of Directors
For NHC FOODS LIMITED
Apoorva Shah
(Chairman & Managing Director)
Place: Mumbai Din : 00573184
Date: 01-08-2019