The members of
Ovobel Foods Limited
Your Directors are pleased to present the 27th (Twenty Seventh) AnnualReport of Ovobel Foods Limited together with the Audited Statement of Accounts forthe year ended 31st March 2019.
1. PERIOD OF THE REPORT:
This report pertains to the period from 01stApril 2018 to 31stMarch2019.
2. EXTRACT OF ANNUAL RETURN AS PROVIDED UNDER SECTION 92(3):
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure I".
3. FINANCIAL SUMMARY AND HIGHLIGHTS:
The following gives a summary of the financial results of the Company:
| || ||(Rupees in Lakhs) |
|Particulars ||For the year ended 31.03.2019 ||For the year ended 31.03.2018 |
|Total Income ||11211.51 ||9997.42 |
|Total Expenses excluding Finance Cost & Depreciation ||10185.25 ||9250.90 |
|Finance Cost & Depreciation ||185.65 ||219.46 |
|Total Expenses including Finance Cost & Depreciation ||10370.89 ||9470.36 |
|Net Profit (Loss) Before Tax ||840.61 ||527.06 |
|Tax Expenses: || || |
|Current Tax / Taxes of earlier year ||241.63 ||103.11 |
|Deferred Tax charge/(Income) ||33.77 ||(28.92) |
|Net Profit (Loss) After Tax ||565.22 ||452.88 |
|Total Comprehensive Income for the year ||565.51 ||450.00 |
|Earnings Per Share || || |
|Basic & ||5.38 ||4.31 |
|Diluted (in Rs.) ||5.38 ||4.31 |
4. OPERATIONAL REVIEW:
The highlights of the Company performance are as under:
The Net Sales for the period increased from Rs. 8360.18 lakhs (previous year)to Rs. 9729.81 lakhs (current year).
The Profit Before Tax for the period increased from Rs. 527.06 Lakhs (previousyear) to Rs. 840.61 Lakhs (Current year).
Profit/(Loss) after tax for the period increased from Rs. 452.88 Lakhs (previousyear) to Rs. 565.22 lakhs (Current year).
Your board will take required actions for further increasing the revenue and reducingthe cost of the Company.
5. 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.
6. SHARE CAPITAL AND ITS CHANGES:
|Sl. No. Particulars ||Share Capital (No. of shares) ||Share Capital (In Rupees) |
|1 Authorized share Capital ||11000000 ||110000000 |
|2 Issued Subscribed & Paid up share capital ||10500800 ||105008000 |
During the year there has been no change in the capital structure of the company.
7. TRANSFER TO RESERVES AND SURPLUS ACCOUNT:
During the financial year entire profit of the Company has been transferred to thereserves and surplus account.
During the financial year ended 31st March 2019 the company has notproposed for any dividend payable 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.
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.
10.INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY:
The Company does not have any subsidiary Company during the period under review.
11.CHANGES IN COMPOSITION OF BOARD OF DIRECTORS AND KMP:
During the financial year 2018-19 following changes have been occurred in the board ofdirectors of the Company.
|SL. No Name of Director ||DIN ||Designation ||Appointment / Resignation ||With effect from |
|1. Swapan Kuamr Majumder ||03178122 ||Independent Director ||Re-Appointment ||24.09.2018 |
|2. Satish Narayana Swamy ||05264105 ||Independent Director ||Re-Appointment ||24.09.2018 |
|3. Shanti Swarup Aggarwal ||00322011 ||Managing Director ||Re-Appointment ||24.09.2018 |
12.POLICIES ON APPOINTMENT OF DIRECTORS REMUNERATION AND OTHER MATTERS:
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 33.8:1.
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 2018-19 ||Remuneration for the FY 2017-18 ||Percentage Increase / Decrease in the remuneration |
| || || |
(Rs. in lakhs)
(Rs. in lakhs)
|Shanti Swarup Aggarwal ||Managing Director ||84 ||84 ||Nil |
|Sudhir Kulkarni ||Chief Financial Officer ||19 ||18 ||5.56 |
|Ritu Singh ||Company Secretary ||2 ||2 ||Nil |
The percentage increase in the median remuneration of employees in the financialyear is: 1.43% (Approx.)
The number of permanent employees on the rolls of company: 119 (As on31.03.2019).
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 in2018-19 was 13.76 % (approx.). there are no changes in the managerial remuneration for theyear.
The key parameters for any variable component of remuneration availed by the directors: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 theCompany.
Names of the top ten employees in terms of remuneration drawn:
|Name ||Remunerat ion received (Amount in Rs.) ||Nature of employme nt whether contractua l or otherwise ||Qualification & Experience ||Date of commencement of employment ||Age ||Percentage of equity shares held by the employee as a remuneration ||Whether any employee is a relative of any director/ manager of the Company and if so name of such director/ manager |
|S S Aggarwal Sudhir ||8400000 ||Permanent ||B. Com ||11-01-1993 ||68 ||Nil ||Nil |
|Kulkarni ||1900000 ||Permanent ||B. Com ||17-02-2011 ||59 ||Nil ||Nil |
|Sabitha Maheshwaran ||1283947 ||Permanent ||M.Phil. Ph.D. in FSN ||11-03-2017 ||44 ||Nil ||Nil |
|Ashwani Kumar Arora ||1164344 ||Permanent ||B. Tech ||12-09-2016 ||33 ||Nil ||Nil |
|Mohan. T. Gangoor ||1119825 ||Permanent ||B. E ||01-08-1997 ||51 ||Nil ||Nil |
|Sahadevan C ||825526 ||Permanent ||M.Sc. M.Phil. B.Ed. Ph.D. ||19-09-1998 ||52 ||Nil ||Nil |
|Sunil Varghese P ||777667 ||Permanent ||B. Com ||16-03-2015 ||43 ||Nil ||Nil |
|Vijaysekhar. T ||481399 ||Permanent ||B.Tech(Food Process Engg.) ||03-07-2017 ||31 ||Nil ||Nil |
|Regina Mary D ||400060 ||Permanent ||B. Com ||01-06-2006 ||43 ||Nil ||Nil |
|Srinivas O. L ||228560 ||Permanent ||B. Com (incomplete) ||01-06-2006 ||55 ||Nil ||Nil |
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.
The Company does not have any Risk Management Policy as the elements of riskthreatening the Company's existence are very minimal.
14.PARTICULARS OF CONTRACTS UNDER SECTION 188:
The Company has entered various Related Parties Transactions as defined under Section188 of the Companies Act 2013 with related parties as defined under Section 2 (76) of thesaid Act. Further all the necessary details relating to related party transactions duringthe period under review are provided in AOC-2 as "Annexure II".
The policy on the Related Parties Transactions has been disclosed on the website of theCompany. Below is the link of the website.
15.DISCLOSURE UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The company has in place a Policy for prevention of Sexual Harassment at the Workplacein line with the requirements of the Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013 and also has a policy and frameworkfor employees to report sexual harassment cases at workplace and its process ensurescomplete anonymity and confidentiality of information. Adequate workshops and awarenessprogrammes against sexual harassment are conducted across the organization.
The following is a summary of sexual harassment complaints received and disposed ofduring the year under review:
a) Number of complaints pending at the beginning of the year: Nil
b) Number of complaints received during the year: Nil
c) Number of complaints disposed of during the year: Nil
d) Number of cases pending at the end of the year: Nil
16.DISCLOSURE UNDER SECTION 134(3)(l) OF THE COMPANIES ACT2013:
Except as disclosed elsewhere in this report if there have been any material changesand commitments which can affect the financial position of the Company occurred betweenthe end of the financial year of the Company and the date of this report the same shallbe reported here: Nil.
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 offive years 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.
As per the applicable provisions of the Companies Act 2013 and relevant rules madethereunder the Audited financial statements along with Statutory Audit report for the FY2018-19 is hereby annexed as Annexure IX.
18.SECRETARIAL AUDITOR AND REPORT:
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.
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 AnnexureVI.
The requirement of appointment of cost auditors is not applicable to the Company.
20.EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION/ADVERSEREMARK / DISCLAIMER MADE BY THE AUDITORS:
(i) Statutory Auditor's observations/comments/qualifications:
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.
Management Reply: The Company is taking necessary measures to physically verify thefixed assets. The Company is also planning to increase the frequency of verification offixed assets in the coming future.
(ii) Secretarial Auditor's observations/comments/qualifications:
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. I 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.
c. There were Two days delay in submission of financial results for the 1st Quarterended 30.06.2018 and One day delay furnishing prior intimation about the Board meetingdated 14.11.2018 to BSE in pursuant to Regulation 33 & 29 of SEBI (LODR) Regulations2015.
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. The Directors of the Company had visited to the StockExchange and discussed the matter relating to delisting of shares.
c. The delay in filing of financial results was due to technical error in the BombayStock Exchange's (BSE) website while submitting the financial results with Bombay StockExchange (BSE). Further the Company Suo moto has submitted request letter for condonationof delay in filing the financial results.
The delay in furnishing prior intimation of the Board of directors meeting was due tomedical emergency of Mrs. Ritu Singh Company Secretary cum Compliance officer of theCompany. Further the Company has submitted request letter for condonation of delay infurnishing prior intimation of Board of Directors meeting.
21.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 the annual accounts the applicable accounting standards hadbeen followed along with proper explanation 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 so as to give a true andfair view of the state of affairs of the company at the end of the financial year i.e.31.03.2019 and of the profit 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; and
e) The directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively:
f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
CFO Certification Pursuant to SEBI (LODR) Regulation 2015 forms part of this AnnualReport and annexed to this Report as Annexure VIII.
23.COMPLIANCE WITH SECRETARIAL STANDARD:
The company is in compliance with the applicable Secretarial Standards and otherSecretarial Standards voluntarily adopted by the company.
24.EMPLOYEE STOCK OPTION PLAN (ESOP):
During the year there was no Employee Stock Option plan in the company.
25.INTERNAL FINANCIAL CONTROLS 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.
26.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.
The policy on the Corporate Social Responsibility has been disclosed on the website ofthe Company. Below is the link of the website.
27.PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
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 andas on 31.03.2019 was Rs. 3.90 Lakhs).
28.CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/ OUTGO INTERMS OF SECTION 134(3)(m) OF THE COMPANIES ACT 2013 AND RULE 8 OF COMPANIES (ACCOUNTS)RULES 2014:
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 380 kgs/hr.
The Capacity of the boiler is 2000000 kcals/hr. and the Company has investedRs.3503000/- (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 Exchange Outflow/Inflow:
|Particulars ||31.03.2019 ||31.03.2018 |
| || |
(Rupees in Lakhs)
(Rupees in Lakhs)
|Foreign Exchange Earnings ||8377.11 ||7491.98 |
|Foreign Exchange Expenditures ||266.86 ||239.58 |
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.
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.
31.CHANGE OF REGISTRAR & SHARE TRANSFER AGENTS:
During the Financial Year 2018-19 there was no change in Registrar and Share transferagents.
32.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 2018-19 as per BIFR proceedings Karnataka State Industrialand Infrastructure Development Corporation Limited (KSIIDC) & Ministry of FoodProcessing Industry (MFPI) have accepted the scheme of one-time settlement and have issuedno due certificate.
33.MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Report on Management Discussion and Analysis Report as required under Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 forms part of this Annual Report and is annexed to this Report as Annexure III.Certain Statements in the said report may be forward looking. Many factors mayaffect the actual results which could be different from what the Directors envisage interms 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 2019 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.
35.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.
The Independent Directors meeting to review the performance of thenon-Independent Directors and Board as whole was held on 11.03.2019.
37.BOARD MEETINGS/COMMITTEE MEETINGS:
During the financial year 2018-19 Six Board Meetings and Twenty-Three CommitteeMeetings were held. The details of all Board meeting and Various Committee's Meeting aregiven in the Corporate Governance Report. The intervening gap between the Meetings waswithin the time prescribed under the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015.
38.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 workplace 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/
39.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.
During the financial year 2018-19 4 (Four) Audit Committee Meetings 1 (One)Nomination and Remuneration Committee Meeting 17 (Seventeen) 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.
40.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/
41.ACKNOWLEDGEMENTS AND APPRECIATIONS:
Your Directors gratefully acknowledge all stakeholders of the Company viz. customersmembers clients employees consultants associates solicitors vendors shareholdersbankers and business associates for the excellent support received from them during theyear. The Directors place on record their sincere appreciation to all employees of theCompany for their unstinted commitment and continued contribution to the Company.
For and on behalf of the Board of Ovobel Foods Limited
|Sd/- ||Sd/- |
|Shanti Swarup Aggarwal ||Swapan Kumar Majumder |
|Managing Director ||Director |
|DIN: 00322011 ||DIN: 03178122 |
|Place: Kolkata ||Place: Kolkata |
|Date:30.05.2019 ||Date: 30.05.2019 |
|Sd/- ||Sd/- |
|Sudhir Kulkarni ||Ritu Singh |
|Chief Financial Officer ||Company Secretary & Compliance Officer |
|PAN: AFEPK8240D ||Membership No.: A24934 |
|Place: Bangalore ||Place: Bangalore |
|Date: 30.05.2019 ||Date: 30.05.2019 |