BOARD'S REPORT TO, THE MEMBERS OF SHAH FOODS LIMITED Your Directors have pleasure in presenting the 33rd Board's Report of your Company together with the Audited Statement of Accounts and the Auditors' Report of your company for the financial year ended, 31st March, 2015. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK We are in active dialogue with Britannia, for whom we have worked for 24 years as a reliable and dependable supply chain partner of utmost integrity, to give us sufficient volume at appropriate conversion rate for us to be able to continue operating as we have. We seek a viable commercial arrangement with Britannia. CHANGE IN NATURE OF BUSINESS, IF ANY Your Company continues to operate in same business segment as that of previous year and there is no change in the nature of the business DIVIDEND In order to conserve the resources of the Company, the Board of directors has not recommended any dividend for current year. AMOUNTS TRANSFERRED TO RESERVES The Board of Directors proposed to carry nil amounts to General Reserve Account CHANGES IN SHARE CAPITAL, IF ANY There was no change in the share capital of the Company during the year. INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY Company does not have any Subsidiary, Joint venture or Associate Company. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND The Company has transferred an amount of Rs. 47493 of unclaimed dividend for accounting year 2006-07 to Investor Education And Protection Fund. MATERIAL CHANGES AND COMMITMENTS No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which this financial statement relate and on the date of this report. MEETINGS OF THE BOARD OF DIRECTORS During the Financial Year 2014-15, the Company held four Board meetings of the Board of Directors as per Section 173 of Companies Act, 2013 which is summarized below. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings. AUDIT COMMITTEE The role of the Audit Committee is in accordance with the Section 177 of the Companies Act, 2013 which shall include the following: 1) Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. 2) The recommendation for appointment, remuneration and terms of appointment of auditors of the company; 3) Approval of payment to statutory auditors for any other services rendered by them. 4) Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to: a) Matters required tobe included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (C) of sub-section 3 of section 134 of the Companies Act, 2013. b) Changes, if any, in accounting policies and practices and reasons for the same c) Major accounting entries involving estimates based on the exercise of judgment by management d) Compliance with listing and other legal requirements relating to financial statements e) Disclosure of any related party transactions 5) Reviewing, with the management, the quarterly financial statements before submission to the board for approval 6) Review and monitor the auditor's independence and performance and effectiveness of audit process. 7) Evaluation of internal financial controls and risk management systems. 8) Reviewing the adequacy of internal audit function and frequency of internal audit. 9) Discussion with internal auditors any significant findings and follow up there on 10) To oversee the vigil mechanism and review the functioning of the whistle blower policy 11) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee The company's Audit Committee comprised of three non executive directors. The board has accepted the recommendations of the Audit Committee. The table sets out the composition and participation of the member at the meeting of audit committee. NOMINATION AND REMUNERATION COMMITTEE In terms of section 178 of the Companies Act, 2013, it is mandatory for all listed companies to constitute a Nomination & Remuneration Committee (N&RC) to take care of the nomination of Directors, KMP, etc. and remuneration related matters of the Directors, KMPs and Employees, etc. The Terms of Reference of the Nomination & Remuneration Committee include followings. 1) To identify persons who may be appointed in senior management and shall carry out evaluation of every Director's performance. 2) To recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees. 3) The Nomination and Remuneration Committee shall, while formulating the policy ensure that: a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully; b) elationship of remuneration to performance is clear and meets appropriate performance benchmarks; and 4) Regularly review the Human Resource function of the Company 5) Discharge such other function(s) or exercise such power(s) as may be delegated to the Committee by the Board from time to time. 6) Any other work and policy, related and incidental to the objectives of the committee as per provisions of the Act and rules made there under. REMUNERATION TO DIRECTORS The remuneration paid to Executive Directors is recommended by the Nomination and Remuneration Committee and approved by Board in Board meeting, subject to the subsequent approval of the shareholders at the General Meeting and such other authorities, as may be required. The remuneration is decided after considering various factors such as qualification, experience, performance, responsibilities shouldered, industry standards as well as financial position of the Company. Remunerationpaid for the year ended 31st March, 2015was as under: RATIO OF REMUNERATION TO EACH DIRECTOR The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished here as annexure 1. STAKEHOLDER RELATIONSHIP COMMITTEE The terms of reference of the Committee include reviewing and redressing complaints from shareholders such as non-receipt of annual report, transfer of shares, issue of duplicate share certificates, etc.; to oversee and review all matters connected with transfers, transmissions, dematerialization, rematerialization, splitting and consolidation of securities; to oversee the performance of the Registrar and Transfer Agent and recommends measures for overall improvement in the quality of investor services; and to perform any other function, duty as stipulated by the Companies Act, Securities & Exchange Board of India, Stock Exchanges and any other regulatory authority or under any applicable laws, as amended from time to time. Committee met four times during FY 2014-15 i.e. 29/05/2014, 28/07/2014, 04/11/2014 and 31/01/2015. The Composition of the Stakeholders Relationship Committee and details of Members participation at the Meetings of the Committee are as under: In addition, Details of Shareholders' Complaints received during the year are as follows: Particulars No. of Complaints Investor complaints pending as at April 1, 2014 0 Investor complaints received during the year ended on March 31, 2015 0 Investor complaints resolved during the year endedMarch 31, 2015 0 Investor complaints pending as on March 31, 2015 0 Share transfer committee The Stakeholder relationship committee has delegated power of approving transfer of securities to ShriJanak P Shah and ShriNirav J Shah. The Committee, inter alia, reviews and approves the transfer/ transmission/ D-mat of equity shares as submitted by BigShare., the Registrar & Transfer Agent of the Company. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that- a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 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 adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 directorshad laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DIRECTORS AND KMP In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013,Shri Janak. P. Shah(DIN- 01880079) and Shri Sushil P. Shah (DIN-02529990) would retire by rotation at the ensuing AGM and being eligible, offers himself for reappointment. The term of the Shri Shrichand Kahar as Director is Expiring on 30/09/2015. On recommendation of Nomination & Remuneration Committee. Your Directors recommend to approve his reappointment as Director for further period of 3 years on a remuneration as specified in the Notice calling Annual General Meeting. During the current financial year the following changes have occurred in the constitution of directors of the company: S.No Name Designation Date of appointment 1 Mrs Pushpa Janak Shah Additional Director 25/03/2015 Mrs. Pushpa Janak Shah holds the position till this AGM. The Board has issued the notice for her reappointment and recommends her resolution for the approval of the shareholders at AGM. The Board has identified the following officials as Key Managerial Personnel pursuant to Section 203 of the Companies Act, 2013: INDEPENDENT DIRECTORS AND DECLARATION Mr. Virendra Shah has been appointed as the independent director of the company as per Section 149(10) of the Companies Act, 2013 on 20/09/2014 for a term of 5 (Five) consecutive years on the Board of the Company. The Board of Directors of the Company hereby confirms that the Independent director duly appointed by the Company has given the declaration and he meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013. AUDITORS AND REPORT THEREON M/s Dinesh R Shah & Co., Chartered Accountants, Ahmedabad retire at the ensuing Annual General Meeting and, being eligible; offer themselves for reappointment for a period of two years from the conclusion of this Annual General Meeting [AGM] till the conclusion of 35th AGM There are no qualifications or adverse remarks in the Auditors' Report which require any clarification/ explanation. The Notes on financial statements are self-explanatory, and needs no further explanation. The Secretarial Audit Report for the financial year ended, 31st March, 2015 is annexed herewith for your kind perusal. DEPOSITS The company has not accepted any deposits during the year LOANS, GUARANTEES AND INVESTMENTS There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable RELATED PARTY TRANSACTIONS The Company has not entered into any Related Parties Transactions as defined under Section 188 of the Companies Act, 2013 with related parties as defined under Section 2 (76) of the said Act. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO: A. Conservation of energy a) The Company has not made any investment for (energy conservation) and taken any specific measures to reduce energy cost per unit. However, it intends to conserve energy for future generation. B. Technology absorption There is no research and development activity carried out by the Company. C. Foreign exchange earnings and Outgo There were no foreign exchange earnings and outgo during the year under review. RISK MANAGEMENT Periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the company to control risk through a properly defined plan. The risks are classified as financial risks, operational risks and market risks. The risks are taken into account while preparing the annual business plan for the year. The Board is also periodically informed of the business risks and the actions taken to manage them. The Company has formulated a policy for Risk management with the following objectives: • Provide an overview of the principles of risk management • Explain approach adopted by the Company for risk management • Define the organizational structure for effective risk management • Develop a "risk" culture that encourages all employees to identify risks and associated opportunities and to respond to them with effective actions. • Identify access and manage existing and new risks in a planned and coordinated manner with minimum disruption and cost, to protect and preserve Company's human, physical and financial assets. CORPORATE SOCIAL RESPONSIBILITY The company does not meet the criteria of Section 135 of Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 so there is no requirement to constitute Corporate Social Responsibility Committee. ANNUAL EVALUATION Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. A separate exercise was carried out to evaluate the performance of individual Directors includingthe Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. VIGIL MECHANISM As per Section 177(9) and (10) of the Companies Act, 2013, the company has established Vigil Mechanism for directors and employees to report genuine concerns and made provisions for direct access to the chairperson of the Audit Committee.Company has formulated the present policy for establishing the vigil mechanism/ Whistle Blower Policy to safeguard the interest of its stakeholders, Directors and employees, to freely communicate and address to the Company their genuine concerns in relation to any illegal or unethical practice being carried out in the Company. INTERNAL CONTROL SYSTEM The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of the Company are regularly carried out to review the Internal Control Systems. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS Internal financial control is in place commensurate with the size of the Company EXTRACT OF ANNUAL RETURN The Extract of Annual Return as required under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 is annexed as annexure-2 herewith for your kind perusal and information. SHARES BUY BACK OF SECURITIES The Company has not bought back any of its securities during the year under review. SWEAT EQUITY The Company has not issued any Sweat Equity Shares during the year under review. BONUS SHARES No Bonus Shares were issued during the year under review. EMPLOYEES STOCK OPTION PLAN The Company has not provided any Stock Option Scheme to the employees. SHARES IN SUSPENSE ACCOUNT i. Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year: Nil ii. Number of shareholders who approached issuer for transfer of shares from suspense account during the year: Not Applicable iii. Number of shareholders to whom shares were transferred from suspense account during the year: Not Applicable iv. aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year: Nil v. That the voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares: Not Applicable SHARES IN UNCLAIMED SUSPENSE ACCOUNT i. Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the beginning of the year Nil ii. Number of shareholders who approached the issuer for transfer of shares from the Unclaimed Suspense Account during the year: Not Applicable iii. Number of shareholders to whom shares were transferred from the Unclaimed Suspense Account during the year: Not Applicable iv. Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the end of the year: Nil MATERIAL VARIATIONS The material variations between the projections and the actual utilization/profitability are as follows: Nil CODEOFCONDUCT The Code of Conduct for all Board members and Senior Management of the Company have been laid down and are being complied with in words and spirit. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS No orders were passed by the regulators or courts or Tribunals impacting the going concern status and company's operation in future. ACKNOWLEDGEMENT The Board places on record their appreciation of the support of all stakeholders. Place: By order of the Board Registered office: Chhatral, Kalol-Mehsana Highway, Taluka - Kalol, Gandhinagar- 382729 Mr. Janak P shah Vice Chairman DIN:01880079 Date: 01/08/2015 Place : Ahmedabad |