To the members of Ovobel Foods Limited
Your Directors are pleased to present the 26th (Twenty Sixth) AnnualReport of Ovobel Foods Limited together with the Audited Statement of Accounts forthe year ended 31st March 2018.
1. FINANCIAL RESULTS
The financial results of the Company during the year under review are summarized asunder:
| || || |
(Rupees In Lakhs)
|Particulars ||For the year ended 31.03.2018 ||For the year ended 31.03.2017 |
|Total Income ||9997 ||8133 |
|Total Expenses excluding Finance ||9251 ||8218 |
|Cost & Depreciation || || |
|Finance Cost & Depreciation ||219 ||206 |
|Total Expenses including Finance ||9470 ||8424 |
|Cost & Depreciation || || |
|Net Profit (Loss) Before Tax ||527 ||(291) |
|Tax Expenses: || || |
|Current Tax / Taxes of earlier year ||105 ||50 |
|Deferred Tax charge/(Income) ||(29) ||10 |
|Net Profit (Loss) After Tax ||451 ||(351) |
|Earnings Per Share || || |
|Basic & ||4.29 ||(3.34) |
|Diluted (in Rs.) ||4.29 ||(3.34) |
2. OPERATIONAL REVIEW:
The highlights of the Company performance are as under:
The Net Sales for the period increased from Rs. 7611 lakhs in the previous yearto Rs. 8360 lakhs.
The Profit Before Tax for the period increased from Rs. -291 Lakhs (previousyear) to Rs. +527 Lakhs (Current year).
Profit/(Loss) after tax for the period increased from Rs. -351 Lakhs (previousyear) to Rs. 451 lakhs (Current year).
Your board will take required actions for further increasing the revenue and reducingthe cost of the Company.
3. NATURE OF BUSINESS:
The company operates in the domain of egg powder and frozen egg manufacture andexports.
There has been no change in the nature of business of the Company during the year underreview.
During the year ended 31st March 2018 the company has not proposed for any dividendpayable to the shareholders.
The Board regret its inability to recommend any dividend as it is considered prudent toconserve the resources for investments in the business.
5. SHARE CAPITAL:
The Authorized Capital and Paid-up Capital of the Company as on March 31 2018 was Rs.110000000/- and Rs. 105008000/- respectively. There has been no change in thecapital structure of the company during the year.
6. SUBSIDIARY COMPANIES:
The Company does not have any subsidiary Company during the period under review.
7. FIXED DEPOSITS:
During the financial year under review the Company did not accept any deposits coveredunder chapter V of the Companies Act 2013 and Section 73 of the Companies Act 2013 andthe Companies (Acceptance of Deposits) Rules 2014.
8. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has invested in 10000 Equity Instruments at a face value of Rs. 10/- eachfully paid in SMIFS Capital Markets Limited (Quoted) on 28th March 1995.(Market value of the equity shares as on 31st March 2018 was Rs. 5.68 lakhs).
9. MATERIAL CHANGES AND COMMITMENTS:
Material changes and commitments affecting our financial position between the end ofthe financial year to which this financial statement relates and date of this report:
During the financial year 2017-18 following to the repealment of SICA KSIIDC haveaccepted the One-time settlement scheme and have issued no due certificate and alsoreleased the 500000 equity shares to the Company. A similar approval and issue of no duecertificate are awaited from MFPI as well. Consequently the Company has written back itsexcess provisions towards accrued interest to KSIIDC amounting to Rs. 1041 lakhs andawaiting a similar approval to be received by MFPI to approach CBDT/ SEBI seekingextension of the reliefs/ waivers as envisaged in the Rehabilitation Scheme.
10.INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company had laid down guidelines policies procedures and structure to enableimplementation of appropriate internal financial controls across the Company. Thesecontrol processes enable and ensure the orderly and efficient conduct of Company'sbusiness including safeguarding of assets prevention and detection of frauds and errorsthe accuracy and completeness of the accounting records and timely preparation &disclosure of financial statements. Review and control mechanisms are built in to ensurethat such control systems are adequate and operating effectively. To maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board & Managing Director.
11.EXTRACT OF ANNUAL RETURN:
An extract of the Annual Return in Form MGT-9 in compliance with Section 92 of theCompanies Act 2013 read with applicable Rules made thereunder is annexed to this report asAnnexure-I.
12.PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
Company has adopted a framework and policy for approving relating party arrangements /transactions. Review of Related Party arrangements / transactions is carried by the AuditCommittee at its meetings. Company has framed Related Party Transactions Policy providingthe framework for approval of related party transactions by the Audit Committee and Board.
The details of the Related Party Transactions during the period under review areprovided in Annexure II (AOC-2) which forms part of Board Report.
The policy on the Related Parties Transactions has been disclosed on the website of theCompany. Below is the link of the website.
13.MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Report on Management Discussion and Analysis Report as required under ListingRegulations forms part of this Annual Report and is annexed to this Report as AnnexureIII. Certain Statements in the said report may be forward looking. Many factorsmay affect the actual results which could be different from what the Directors envisagein terms of the future performance and outlook.
Your Company is committed to observe good Corporate Governance practices. The report onCorporate Governance for the financial year ended March 31 2018 as per Regulation 34(3)read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of this Annual Report and is annexed to this Report as AnnexureV. The requisite certificate from Statutory Auditors M/s Narahari &Raghavendra Bangalore confirming Compliance with the provisions of Corporate Governanceis attached to this Report as Annexure IV.
Pursuant to the provisions of Section 204 and other applicable provisions of theCompanies Act 2013 and the rules made thereunder the Board of Directors has appointedMr. Rafeeulla Shariff Practicing Company Secretary Bangalore as Secretarial Auditor toconduct the Secretarial Audit of the Company for the Financial Year 2018-19.
16.SECRETARIAL AUDITOR'S REPORT:
Section 204 of the Companies Act 2013 read with rules made thereunder inter-aliarequires every listed company to annex with its Board report a Secretarial Audit Reportgiven by a Company Secretary in Practice in the Form MR-3.
As per the above-mentioned provisions Secretarial Audit report is hereby annexed as
In Secretarial Audit report issued by Mr. Rafeeulla Shariff Practising CompanySecretary for the Financial Year 2017-18 the following observations were made.
a. Listed entity shall ensure that hundred percent of shareholding of promoter(s) andpromoter group to be in dematerialized form and the same is maintained on a continuousbasis in the manner as specified by the Board. We observed that one of the promoters(M/s. Ovobel NV) shares are not in dematerialized form as prescribed in the provisions ofRegulation 31 (2) of SEBI (Listing Obligations And Disclosure Requirements) Regulation2015.
b. The Company is suspended from trading of securities at Calcutta Stock ExchangeLimited.
a. The directors of the Company have intimated to the respective promoters to converttheir shares from physical form into dematerialized form and the respective promoters arein the process of conversion of their physical shares into dematerialized form.
b. The Directors of the Company will take necessary steps for delisting of securitiesat
Calcutta Stock Exchange Limited.
17.CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company as part ofits CSR initiatives has undertaken projects/programs in accordance with the CSR Policy andthe details of the CSR activities are given as Annexure VII forming part ofthis Report.
18.CHANGES IN COMPOSITION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the financial year 2017-18 there were no changes in the composition of Board ofDirectors and Key managerial personnel.
19.DIRECTOR'S RESPONSIBILITY STATEMENT:
In Compliance with Section 134(5) of the Companies Act 2013 the Board of Directors tothe best of their knowledge and hereby confirm the following: a. In the preparation of theannual accounts the applicable accounting standards had been followed along with properexplanation relating to material departures.
b. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period.
c. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.
d. The Directors had prepared the annual accounts on a going concern basis.
e. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively.
f. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
The Board of Directors has constituted four Committees i.e. Audit CommitteeStakeholder Relationship Committee Nomination and Remuneration Committee CorporateSocial Responsibility Committee as per requirement of Corporate Governance under SEBI(LODR) Regulation 2015. The majority of the members of these Committees are Independentand non-executives directors.
During the financial year 2017-18 4 (Four) Audit Committee Meetings 1 (One)Nomination and Remuneration Committee Meeting 11 (Eleven) Stakeholders RelationshipCommittee Meetings and 1 (One) Corporate Social Responsibility Meetings were held at theCompany as per requirement of Corporate Governance and any other applicable Regulations ofthe SEBI (LODR) Regulation 2015.
CFO Certification Pursuant to SEBI (LODR) Regulation 2015 forms part of this AnnualReport and annexed to this Report as Annexure VIII.
21.DECLARATION BY INDEPENDENT DIRECTORS:
All independent directors have given declarations stating that they meet the criteriaof independence as laid down under section 149(7) and any other applicable provisions ofthe Companies Act 2013 and the rules made thereunder and as per the requirement of SEBI(LODR) Regulation 2015.
As per the provisions of the Companies Act 2013 and SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015 the formal annual evaluation was carriedout for the Board's own performance its committee & Individual directors. TheIndependent Directors meeting to review the performance of the non-Independent Directorsand Board as whole was held on 27.03.2018.
23.BOARD MEETINGS/COMMITTEE MEETINGS:
During the financial year 2017-18 Six Board Meetings and Seventeen Committee Meetingswere held. The details of all Board meeting and Various Committee's Meeting are given inthe Corporate Governance Report. The intervening gap between the Meetings was within thetime prescribed under the Companies Act 2013 and the rules made thereunder.
24.CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL:
The Code lays down the standard procedure of business conduct which is expectedto be followed by the Directors and the designated employees in their business dealingsand on matters relating to integrity in the work place in business practices and indealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in each situation and the reporting structure.
All the Board Members and the Senior Management personnel have confirmedcompliance with the Code.
The Code of conduct has been posted on the Company websitehttp://www.ovobelfoods.com/general-information/policies/code-conduct/
25.AUDIT COMMITTEE /STAKEHOLDER RELATIONSHIP COMMITTEE /NOMINATION AND REMUNERATIONCOMMITTEE /CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The Board of Directors has constituted four Committees i.e. Audit CommitteeStakeholder Relationship Committee Nomination and Remuneration Committee CorporateSocial Responsibility Committee as per requirement of Corporate Governance under SEBI(LODR) Regulation 2015 and any other applicable provisions of Statutes. The majority ofthe members of these committees are Independent and non-executives.
The Statutory Auditors M/s Nara Hari & Raghavedra Chartered AccountantsBangalore (Firm registration No. 014509S) was appointed as Statutory Auditor of theCompany on
Annual General Meeting held on 29th December 2016 for a tenure of fiveyears as per the provisions of Section 139 of the Companies Act 2013 i.e. theappointment is valid till the conclusion of 29th Annual General Meeting for the Financialyear 2020-2021.
27.STATUTORY AUDITOR'S REPORT:
Point No (i) (b) of CARO Report states that: The Company has a regular program ofphysical verification of its fixed assets by which fixed assets are verified in a phasedmanner over a period of three years. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. However in the current year no physical verification of fixed assets has beendone by the Company and hence we are unable to comment on the discrepancies as no physicalverification has been conducted.
The Company is taking necessary measures to physically verify the fixed assets. TheCompany is also planning to increase the frequency of verification of fixed assets in thecoming future.
Further the Auditors Report along with financials statement and notes thereon annexedto this Report as Annexure IX and forms part of this Report.
The requirement of appointment of cost auditors is not applicable to the Company.
29.VIGIL MECHANISM /WHISTLE BLOWER POLICY:
Your Company has laid down a Whistle Blower Policy covering Vigil Mechanism withprotective clauses for the Whistle Blowers to report genuine concerns or grievances. TheWhistle Blower Policy has been hosted on the website of the Company athttp://www.ovobelfoods.com/general-information/policies/whistle-blower-policy/.
30.RISK MANAGEMENT POLICY:
The Company has developed and implemented a risk management policy which identifiesmajor risks which may threaten the existence of the Company. The same has also beenadopted by your Board and is also subject to its review from time to time. Risk mitigationprocess and measures have been also formulated and clearly spelled out in the said policy.
31.CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
a) Conservation of Energy:
With the increase in demand for the non-renewable energy resources such as water andelectricity the Company has been using Wood Fired Boilers in the factory which run on afuel known as Briquettes (Agro waste) instead of electricity.
The Briquettes fuel is made of saw dust groundnut shell coffee husk and tamarindshell.
The consumption of the briquettes per hour is 450 kgs/hr.
The Capacity of the boiler is 2000000 kcals/hr. and the Company has investedRs.4700000/- (inclusive of system oil) towards it.
b) Technology Absorption:
The Company continues to keep abreast the developments and seeks to implement thelatest technology in the factory for the forthcoming years. However there was notechnology imported by the Company during the last three years c) Foreign ExchangeOutflow/Inflow:
|Particulars ||31.03.2018 ||31.03.2017 |
| || |
(Rupees in lakhs)
(Rupees in lakhs)
|Earnings in Foreign Currency ||7492 ||6813 |
|Expenditure in Foreign Currency ||240 ||216 |
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.
Disclosures under Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014:
Your Board report that:
the ratio (Approx.) of the remuneration of each director to the medianremuneration of the employees of the company for the financial year 33.55:1
The percentage increase in remuneration during the financial year of each:Executive Director (including Chief Executive Officer); and Chief Financial Officer andCompany Secretary (or Manager if any)
There was increase or decrease in the remuneration of any Executive Director ChiefFinancial Officer or Company Secretary of the Company. Following are the details of thesame:
|Name ||Designation ||Remuneration in the FY 2017-18 (Rupees in lakhs) ||Remuneration for the FY 2016-17 (Rupees in lakhs) ||Percentage increase in the remuneration |
|Shanti Swarup ||Managing ||84 ||65 ||29.23% |
|Aggarwal ||Director || || || |
|Sudhir Kulkarni ||Chief Financial Officer ||18 ||16 ||12.5% |
|Ritu Singh ||Company Secretary ||1.8 ||- ||- |
The percentage increase in the median remuneration of employees in the financialyear is: 19.35% (Approx.)
The number of permanent employees on the rolls of company: 120 (As on31.03.2018).
Average percentage increases already made in the salaries of employee's otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in the managerial remuneration:
The average increase in salaries of employees other than managerial personnel in2017-18 was 18.91% (approx.). Percentage increase in the managerial remuneration for theyear was 3.95% (approx.)
The key parameters for any variable component of remuneration availed by thedirectors: There is no variable component of remuneration availed by the directors.
Affirmation that the remuneration is as per the remuneration policy of theCompany:
Company affirms that the remuneration is as per the Remuneration policy of the Company.
Names of the top ten employees in terms of remuneration drawn:
|Name || |
Remunerati on received (Amount in Rs.)
|Nature of employmen t whether contractual or otherwise ||Qualification & Experience ||Date of commencement of employment || |
Age of the emplo yee
Percentage of equity shares held by the employee as a remuneration
Whether any employee is a relative of any director/ma nager of the Company and if so name of such director/ma nager
|S S Aggarwal ||8400000 ||Permanent ||B.Com ||11-01-1993 ||67 ||Nil ||Nil |
| || || || || || ||Nil ||Nil |
|Ashwani Kumar Arora ||1419605 ||Permanent ||B.Tech ||12-09-2016 ||32 || || |
| || || || || || ||Nil ||Nil |
|Mohan. T. Gangoor ||1264780 ||Permanent ||B.E. ||01-08-1997 ||50 || || |
|Sudhir Kulkarni ||1753352 ||Permanent ||B.Com ||17-02-2011 ||58 ||Nil ||Nil |
| || || || || || ||Nil ||Nil |
|Sahadevan C ||1089250 ||Permanent ||M.Sc. M.Phil. B.Ed. Ph.D ||19-09-1998 ||51 || || |
|Vinod Namderao Hirde ||861226 ||Permanent ||M.V.Sc. ||20-08-2015 ||31 ||Nil ||Nil |
|Deepak N ||953147 ||Permanent ||B.Tech ||01-03-2017 ||32 ||Nil ||Nil |
|Sunil Varghese P ||900243 ||Permanent ||B.Com ||16-03-2015 ||42 ||Nil ||Nil |
|Selvaraju. D ||543398 ||Permanent ||B.Com ||02-08-2017 ||56 ||Nil ||Nil |
| || || || || || ||Nil ||Nil |
|Sabitha Maheshwaran ||507097 ||Permanent ||M.Phil. Ph.D in FSN ||11-03-2017 ||43 || || |
The Name of every employee who:
(i) if employed throughout the financial year was in receipt of remuneration for thatyear which in the aggregate was not less than one crore and two lakh rupees: Nil.
(ii) if employed for a part of the financial year was in receipt of remuneration forany part of that year at a rate which in the aggregate was not less than eight lakhsand fifty thousand rupees per month: Nil.
(iii) if employed throughout the financial year or part thereof was in receipt ofremuneration in that year which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the company: Nil.
34.PREVENTION OF SEXUAL HARRASSMENT:
In terms of the provisions of the Sexual Harassment of women at workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under the Company has laid downthe policy for prevention and redressal of complaints of sexual harassment at workplace.There was no complaint related to sexual / harassment during the financial year 2017-18.
There have been no frauds reported by the Statutory Auditors of the Company to theAudit Committee or the Board of Directors under sub-section (12) of section 143 of theCompanies Act 2013 during the financial year.
36.CHANGE OF REGISTRAR & SHARE TRANSFER AGENTS:
During the Financial Year 2017-18 there was no changes in Registrar and Share transferagents.
The Board appreciates the commitment and dedication of its employees across all thelevels who have contributed to the growth and sustained success of the Company. We wouldlike to thank all our clients vendors bankers and other business associates for theircontinued support and encouragement during the year.
|For and on behalf of the Board of || |
|Ovobel Foods Limited || |
|Shanti Swarup Aggarwal ||Swapan Kumar Majumder |
|Managing Director ||Director |
|DIN: 00322011 ||DIN: 03178122 |
|Place: Kolkata ||Place: Kolkata |
|Date: 30.05.2018 ||Date: 30.05.2018 |
|Sudhir Kulkarni ||Ritu Singh |
|Chief Financial Officer ||Company Secretary & Compliance Officer |
|PAN: AFEPK8240D ||Membership No.: A24934 |
|Place: Bangalore ||Place: Bangalore |
|Date: 30.05.2018 ||Date: 30.05.2018 |