NHC Foods Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the Annual Report for the Financial Year 2018-19, together with the Audited Financial statements of the Company for the year ended 31st March, 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 Financial Year 2018-2019 as compared to last Financial Year 2017-2018. The Total Revenue of the company increased in March 2019 to Rs. 12531.21 Lacs as compared to previous year revenue which 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 entire amount 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 under implementation, your directors do not recommend any dividend for the year under the review.

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 125 of the Companies Act, 2013 does not apply.

5. Corporate Governance

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

6. Management Discussion and Analysis Report

Management Discussion and Analysis as stipulated under Listing Regulations is presented in a separate section forming part of this Annual Report. It speaks about overall industry structure, global and domestic economic scenarios, developments in business operations, internal controls and their adequacy, risk management systems, and other material developments.

7. Board Meetings:

11 meetings of the Board of Directors were held during the financial year. The details of the meetings of the Board of Directors of the Company conveyed during the financial year 2018-19 are given in the Corporate Governance Report which forms part of Annual Report. The details of attendance of the Directors in the Board Meetings and its Committees 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 by Audit Committee during Financial Year 2018-2019 were accepted by the Board. Further details on the Audit Committee and other Committees of the Board are given in the Corporate 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 of Association of the Company, Mr. Apoorva Shah (DIN:00573184), Chairman & Managing Director of the Company, retires by rotation at ensuing Annual General Meeting and being eligible, offer himself for reappointment. The Board recommends his re-appointment as Director liable to retire by rotation at the ensuing Annual General Meeting.

The Company has received necessary declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under the Act and 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 with effect from 12-07-2019 *Mr. Rajiv Bhatt has resigned as an Independent Director of the company with effect from 12-07-2019.

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

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

Pursuant to provisions of Section 203 of the Act, and the Rules made there under, following 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 result announcements, annual report, media releases, Companys website and subject specific communications. The Annual General Meeting gives the shareholders an opportunity to engage directly with the Board of Directors and Management. During this meeting, the Board engages with shareholders and answer their queries on varied subjects. Your Company has a designated e-mail address for shareholders. The Secretarial department regularly engages with the shareholders to resolve queries, grievances, if any, and provides guidance to the shareholders for any company related matters.

11. ISSUE OF SHARES

The Company during the year under review has not issued any SWEAT equity shares or shares with differential rights or under Employee stock option scheme nor did it buy back any 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 as a Board in order to identify its strengths and areas in which it may improve its functioning. To that end, the Nomination and Remuneration Committee has established processes for performance evaluation of Independent Directors, the Board and Committees of the Board.

Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of its Committees as well as the Directors individually. Details of the evaluation mechanism are provided in the Corporate Governance Report.

Evaluation of Committees was based on criteria such as adequate independence of each Committee, frequency of meetings and time allocated for discussions at meetings, functioning of Board Committees and effectiveness of its advice/recommendation to the Board, etc.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Policy can also be accessed on Companys website at http://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, your Directors state that:

a) in the preparation of the annual accounts for the year ended 31st March, 2019, the applicable accounting standards read with requirements set out under Schedule III 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 consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of 31st March, 2019 and of the profit of the Company for the year 1st April, 2018 to 31st March, 2019;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of 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 the financial year, were in the ordinary course of business and on an arms length basis.

During the year, the Company had not entered into any contract or arrangement with related parties which could be considered ‘material in terms of the Companys Related Party Transactions Policy. Accordingly, there are no transactions that are required 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., Chartered Accountants (Firm Registration No. 120459W) as Statutory Auditor subject to approval of Shareholders in the forthcoming Annual General Meeting, to fill the casual vacancy caused by Resignation of M/s. GMJ & Co., Chartered Accountant due to the reason of Audit Fees being not commensurate with their time & efforts involved in carrying out Statutory Audit of our Company, which has been relocated from Santacruz, Mumbai to Turbhe, Navi Mumbai.

17. AUDITORS OBSERVATIONS:

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

The Secretarial Audit Report for the Financial Year 2018-2019 does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is enclosed as Annexure II to the Boards Report in this Annual Report.

18. Employee Relations:

At NHC Foods, we consider our employees as the most valuable resource and ensure strategic alignment of Human Resource practices to business priorities and objectives. Our constant endeavour is to invest in people and people processes to improve human capital for the organisation and service delivery to our customers. Attracting, developing and retaining the right talent will continue to be a key strategic imperative and the organisation continues its undivided attention towards that. We would like to take this opportunity to express appreciation for the hard work and commitment of the employees of the 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, the Board of Directors has appointed Mr. Dinesh Kumar Deora, Practising Company Secretary, as Secretarial Auditor to conduct the Secretarial Audit of the Company for the Financial Year 2019-20.

20. Annual Return

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management & Administration) Rules, 2014 is furnished in Annexure 4 and is attached to this report.

21. Internal Financial Controls:

The Company has in placed adequate Internal Financial Controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and the Company has, in all material respects, maintained adequate Internal Financial Controls over financial reporting as of 31st March, 2019 for ensuring the orderly and efficient conduct of its business, adherence to Companys policies, safeguarding assets of the Company, Prevention and Detection of Frauds and Errors, Accuracy and Completeness of the Accounting Records and timely preparation of Reliable Financial 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 under review no personnel has been denied access to the audit committee. The Company has adopted a formal Vigil Mechanism/ Whistle-blower policy. The approved policy is available on the Companys website www.nhcgroup.com

23. Disclosure Regarding Prevention of Sexual Harassment:

The Company is committed to maintaining a productive environment for all its employees at various levels in the organisation, free of sexual harassment and discrimination on the basis of gender. The Company has framed a policy on Prevention of Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.The Company has also set up "Prevention of Sexual Harassment Committee" (‘the Committee) to redress the Complaints received regarding sexual harassment which has formalised a free and fair enquiry process with clear timelines. There were no complaints pending for the Redressal at the beginning of 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. 11,85,50,000. During the year under the review the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor Sweat Equity Shares and does not have any scheme to fund its employees 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 of the financial year till the date of this report, which affects the financial position of the Company.

26. CHANGE IN NATURE OF BUSINESS:

There has no change in the nature of business of the Company. Your Company continues to be 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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees 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 officer, Company 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 financial year: 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 the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration NIL.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) 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 aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

28. Companys policy relating to Directors appointment, Payment of remuneration and discharge of their duties.

The companys policy relating to appointment of Directors, Payment of Managerial Remuneration, Directors Qualification and other related matter as provided under section 178(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 in the Nomination & Remuneration Policy of the company.

29. Loans, Guarantees or Investments:

There were no Loans, Guarantees and Investments made by company under Section 186 of the Companies Act, 2013 during the year under review and hence said provision is not applicable.

30. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as prescribed under Section 134(3)(m) of the Act read with Rule 8 of The 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 Responsibility initiatives as the said Provision of Section 135 of the Companies Act, 2013 is not applicable 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 a familiarization programme for Independent Directors to familiarize them with their roles, rights and responsibility as Directors, working of the Company, nature of the industry in which 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 link http://www.nhcgroup.com/wp-content/uploads/2015/01/ Familiarization-Program - for Independent - Directors - of - NHC Foods Limited.pdf

33. RISK MANAGEMENT:

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

The key cornerstones of your Companys Risk Management Framework are:

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

2. Development and deployment of risk mitigation plans to reduce the vulnerability to the 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 top management and the Board review the progress of the mitigation plans;

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

6. Wherever, applicable and feasible, defining the risk appetite and install adequate internal 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 125 of 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 Senior Management Personnel, which is also available on the Companys website: http://www.nhcgroup.com/corporategovernance-. The Company has received confirmation from all Directors as well as Senior Management Personnel regarding compliance with the Code of Conduct during the year under review as required under Regulation 26(3) of the Listing Regulations. Additionally, all Independent Directors of the Company shall be bound by duties of Independent Directors as set out in the Companies Act, 2013 read with the Schedule and Rules there under. Pursuant to Schedule V(D) of the Listing Regulations, a declaration signed by the Managing Director of the Company to this effect is attached at the end of this report.

36. Trade Relations:

Your Directors wish to record appreciation of the continued, unstinted support and co–operation from its retailers, stockists, supplier of goods/services, clearing and forwarding agents and all other associated with it. Your Company will continue to build and 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. The Company has been complying with the relevant laws and has been taking all necessary measures 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 Stock Exchanges. Annual Custody / Issuer fee for the Financial Year 2019-2020 has been paid by the Company to National Securities Depositories Limited and Central Depository Services Limited.

39. General:

Your Directors state that no disclosure or reporting is required in respect of the following 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 of Section 73 of the Act read with Companies (Acceptance of Deposit) Rules, 2014 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet.

b) No significant or material orders were passed by the Regulators, Courts or Tribunals which impact the going concern status and Companys operations in future.

c) The Auditors have not reported any matter under Section 143(12) of the Act, therefore 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 support extended to the Company by customers, vendors, regulators, banks, financial institutions, rating agencies, stock exchanges and depositories, auditors, legal advisors, consultants, business associates and all the employees with whose help, cooperation and hard work the Company is able to achieve the results.

The Board deeply acknowledges the trust and confidence placed by the consumers of the Company 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, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in sub-Section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto:

1. Details of contracts or arrangements or transactions not at arms length basis:

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 at arms length basis or at arms length during Financial Year 2018-2019. The Company has laid down policies and processes/procedures so as to ensure compliance to the subject Section in the Companies Act, 2013 ("Act") and the corresponding Rules. In addition, the process goes through internal and external checking, followed by quarterly reporting 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 value, if any: Not Applicable

(e) Justification for entering into such contracts or arrangements or transactions: Not Applicable

(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 required under first proviso to Section 188: Not Applicable

2. Details of material contracts or arrangement or transactions at arms length basis:

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 value, if 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