DIRECTORS' REPORT THE MEMBERS, Your Directors have pleasure in presenting the 31st Annual Report on the business and operations of the Company and the Audited financial accounts for the year ended March 31, 2016. Transfer to Reserve The Company did not transfer any amounts to the general reserve during the year. Year in Retrospect During the year under review, the Company continued the manufacturing of snack food 'Kurkure' for M/s. Pepsico India Holdings Pvt. Ltd. and infant food products, 'Farex', 'Easum' and 'First Food', for M/s. Nutricia India Pvt. Ltd. on a monthly basis. The Company has also successfully launched their own product under the brand "Cnergy" in the market, and also continues to manufacture and market its existing brand "Bonny Mix" in the local market. For the Financial Year ended March 31, 2016, the Company achieved better results and reported turnover of Rs. 2,386.49 lacs and profit after tax of Rs. 144.07 lacs. Dividend Considering the carry forward losses and in order to strengthen the Company's financials, your Directors do not recommend any dividend for the year under review. Listing Information The equity shares of your Company are listed on the Bombay Stock Exchange Limited (BSE). The listing fees for the year 2016-2017 have been paid to BSE. Accreditation The Company continues to enjoy Food Safety System Certification 22000 accreditation made by SGS United Kingdom Ltd. Public Deposits The Company has not accepted any public deposits during the year under review. Directors' Responsibility Statement To the best of our knowledge and belief and based on the information and representations received from the operating management, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: (a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures; (b) that such accounting policies as mentioned in Notes to the annual accounts have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date; (c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the annual accounts have been prepared on a going concern basis; (e) that proper internal financial controls are in place and that the internal financial controls are adequate and are operating effectively; (f) that proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and operating effectively. Directors During the year, your Board with deep regret noted the sad demise of Late Soiru V. Dempo (DIN 00206062) on September 19, 2015. In his death, the Board has lost a visionary and philanthropist. Mr. Rajesh S. Dempo (DIN 05143106) was appointed as Director on November 9, 2015 to fill up the casual vacancy caused by the demise of Late Soiru V. Dempo. Dr. Asht Bhuja Prasad and Mr. Ashok N. Manrjekar resigned from the Board during the period under report. Your Directors have placed on record their appreciation of the valuable services rendered to the Company by them during their respective tenure as Independent Directors of the Company. In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Rajesh S. Dempo retires by rotation at the forthcoming Annual General Meeting, since the Director in place of whom he is appointed in the casual vacany, would have retired if he had not ceased from office due to death. Being eligible, Mr. Rajesh S. Dempo offers himself for re-appointment. Your Board has recommended his re-appointment. The Board at its meeting held on November 9, 2015, also appointed Mr. Shashi K. Kalathil (DIN 02829333) as an Additional Director of the Company in the category "Independent Director". Mr. Kalathil holds office up to the date of the ensuing Annual General Meeting but is eligible for re-appointment. Brief resume of the directors proposed for appointment / re-appointment together with other relevant details form part of the Notice of the ensuing Annual General Meeting. Key Managerial Personnel Mr. Ganesh T. Argekar, Whole-time Director (Designated "Executive Director"), Mrs. Beena M. Mahambrey, Company Secretary and Mr. Kedarnath Swain, CFO, continued to function as Key Managerial Personnel of the Company during the year under review. Independent Directors' Declarations The Company has received declarations pursuant to Section 149(7) of the Companies Act, 2013, from the Independent Directors of the Company viz., Adv. Sudin M. Usgaonkar and Mr. Shashi K. Kalathil confirming that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 in respect of their position as an "Independent Director" of Hindustan Foods Limited. Meetings of the Board of Directors A minimum of four Board meetings are held annually. Additional Board meetings are convened by giving appropriate notice to address the Company's specific needs. In case of business exigencies or urgency of matters, resolutions are passed by circulation. During the year under review, four Board meetings were held, the details of which are given in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between two consecutive meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations. Audit Committee The Audit Committee comprises of Mr. Shashi K. Kalathil who serves as the Chairman of the Committee and Adv. Sudin M. Usgaonkar and Mr. Rajesh S. Dempo as the other members. The terms of reference etc. of the Audit Committee is provided in Corporate Governance Report which forms part of this Annual Report. All the recommendations made by the Audit Committee during the financial year under review were accepted by the Board. Nomination and Remuneration Committee The composition, terms of reference etc. of the Nomination and Remuneration Committee is provided in Corporate Governance Report which forms part of this Annual Report. The Committee has formulated a Nomination and Remuneration Policy and the same has been uploaded on the website of the Company at www.hflgoa.com Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and regulation 17(10) of the Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Statutory Committees. Based on various criteria, the performance of the Board, various Board Committees, Chairman and Individual Directors (including Independent Directors) was found to be satisfactory. Internal Control System The Board has laid down Internal Financial Controls within the meaning of the explanation to section 134 (5) (e) ("IFC") of the Companies Act, 2013. The Board believes the Company has sound IFC commensurate with the nature and size of its business. Business is however dynamic. The Board is seized of the fact that IFC are not static and are in fact a fluid set of tools which evolve over time as the business, technology and fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There will therefore be gaps in the IFC as Business evolves. The Company has a process in place to continuously identify such gaps and implement newer and or improved controls wherever the effect of such gaps would have a material effect on the Company's operations. Statutory Auditors M/s. R. Sundararaman & Co., Chartered Accountants, Chennai (Registration No. 004219S) have been appointed as the Statutory Auditors of the Company for a period of three years from the conclusion of the 29th Annual General Meeting till the conclusion of the 32nd Annual General Meeting. The Board now recommends the appointment of M/s. R. Sundararaman & Co. for ratification by the members at the Annual General Meeting for the Financial Year 2016-17. Statutory Auditors' Observations The notes on financial statements referred to in the Auditors' Report are self-explanatory and therefore, do not call for any further explanations or comments. There are no qualifications, reservations or adverse remarks or disclaimer made in the Auditors' Report which requires any clarification or explanation. Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules thereunder, the Board of Directors of the Company has appointed CS Sadashiv V. Shet, Practicing Company Secretary to conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended March 31, 2016 forms a part of this Annual Report. The same is self explanatory and requires no comments. Vigil Mechanism / Whistle Blower Policy The Company has established a Vigil Mechanism / Whistleblower Policy for the employees to report their genuine concerns or grievances and the same has been posted on the Company's website www.hflgoa.com The Audit Committee of the Company oversees the Vigil Mechanism. Risk Management The Company follows well-established and detailed risk assessment and minimization procedures, which are periodically reviewed by the Board. The Company has in place a business risk management framework for identifying risks and opportunities that may have a bearing on the organization's objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy. The Senior Management assists the Board in its oversight of the Company's management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall business risk management framework. Particulars of loans, guarantees or investments There was no loans, guarantees and 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 transactions entered with related parties for the year under review were on arm's length basis and in the ordinary course of business and as such provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required. Further, there were no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. As required under Regulation 23(1) of the Listing Regulations, 2015, the Company has formulated a policy on dealing with Related Party Transactions. The Policy has been uploaded on the Company's website : www.hflgoa.com Significant and material orders passed by the Regulators or Courts There were no significant material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations. Particulars of employees and related disclosures None of the employees of the Company were in receipt of remuneration exceeding Rs. 60 lacs per annum or more throughout the year nor exceeding Rs. 5 lacs per month or more for part of the financial year 2015-16. The information required under Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors' Report for the year ended March 31, 2016 is given in a separate Annexure to this Report. The above Annexure is not being sent along with this Report to the Members of the Company in line with the provisions of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by the Members at the Registered Office of the Company, 21 days before the 31st Annual General Meeting and upto the date of the ensuing Annual General Meeting during the business hours on working days. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and outgo The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, required to be disclosed by Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in the Annexure - I to this Report. Corporate Social Responsibility (CSR) The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable. Extract of Annual Return The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure - II and forms an integral part of this Report Disclosures under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013 and the rules made there under, the Company has formulated an internal Policy on Sexual Harassment at Workplace (Prevention, Prohibition and Redressal). The policy aims at educating employees on conduct that constitutes sexual harassment, ways and means to prevent occurrence of any such incident, and the mechanism for dealing with such incident in the unlikely event of its occurrence. The ICC is responsible for redressal of complaints related to sexual harassment of women at the workplace in accordance with procedures, regulations and guidelines provided in the Policy. During the year under review there were no complaints referred to the ICC. Corporate Governance It has been the endeavour of your Company to follow and implement best practices in corporate governance, in letter and spirit. The following forms part of this Annual Report: (i) Declaration regarding compliance of Code of Conduct by Board Members and Senior Management Personnel; (ii) Management Discussion and Analysis; (iii) Report on Corporate Governance and; (iv) Practicing Company Secretary Certificate regarding compliance of conditions of corporate governance. Appreciation and Acknowledgement Your Directors would like to express their appreciation for the assistance and co-operation received from the Government authorities, banks, customers, business associates and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company. For and on behalf of the Board of Directors Ganesh T. Argekar Executive Director DIN: 06865379 Shashi K. Kalathil Additional Independent Director DIN : 02829333 Place : Panaji-Goa date : May 26, 2016 |