DIRECTORS' REPORT To the Members, Your Directors have pleasure in presenting this Twenty Sixth Annual Report together with Audited Accounts of the Company for the Financial Year ended 31st March, 2016. During the year under review, your Company achieved total revenue and net profit of Rs 8528.72 Lacs and Rs 808.60 Lacs respectively as against total revenue and net profit of Rs. 7,491,08 Lacs and Rs. 941.34 Lacs respectively during the previous financial year ended 31st March, 2015. The comprehensive details of performance of the Company has been given in the Management Discussion and Analysis Report appended hereto. TRANSFER TO RESERVES : An amount of Rs.80.86 Lacs has been transferred to General Reserve for the Financial Year ended 31st March 2016. TRANSFER OF UNCLAIMED DIVIDEND : An amount of Rs. 10,61,382/- was transferred to Investor Education and Protection Fund (IEPF) during the year under review. DIVIDEND : Your Directors are pleased to recommend a dividend @ Rs. 2.50 (25%) per share for the financial year ended March 31, 2016 after considering future needs of the company for growth. The dividend, if approved at the forthcoming Annual General Meeting will be paid to Members whose names appear in the Register of Members as on 13.08.2016. In respect of shares held in dematerialized form, it will be paid to those Members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owner. CHANGE IN NATURE OF BUSINESS : There is no change in the nature of business of the Company. SHARE CAPITAL : The paid-up equity share capital outstanding as on 31st March, 2016 was Rs.12.45 Crores. During the year under review, the Company has neither issued Shares with Differential Voting Rights nor granted Stock Options nor Sweat Equity. As on 31st March, 2016 none of the Directors of the Company except the following held shares or convertible instruments of the Company: Mr. Ashok Chaturvedi, Chairman 7,610 Equity Shares FIXED DEPOSITS : The company neither had any fixed deposits outstanding as at 31st March 2016 nor any fresh/renewal of deposits were accepted during the financial year 2015-16. There were no unclaimed deposits as at March 31, 2016. DIRECTORS : During the year, Mr. S.K. Kaushik, Director (DIN: 00027035) has been appointed as Whole-time Director on the Board of the Company w.e.f. 1st March, 2016. Your Directors welcome Mr. Kaushik on the Board of the Company as Whole Time Director. His appointment has been approved by the members of the company through Postal Ballot. In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ashok Chaturvedi, Chairman (DIN 00023452) of the Company retire by rotation and being eligible, offers himself for reappointment. Mr. P.N. Sharma has been appointed as an Additional Director on the Board w.e.f. 26th May, 2016. Your Directors welcome Mr. P.N. Sharma on the Board of the Company. The brief Resume and other details as required under the Securities & Exchange of Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 are provided in the Notice of Annual General Meeting of the Company. All the Independent Directors of your Company have given declarations confirming that they meet the criteria of Independence as prescribed both under the Act and Securities & Exchange of Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015. RELATIONSHIP BETWEEN DIRECTORS INTER-SE : None of the Directors are related to each other within the meaning of the term "relative" as per Section 2(77) of the Companies Act, 2013. DIRECTORS' RESPONSIBILITY STATEMENT : On the basis of compliance certificates received from the Executives of the Company, subject to disclosures in the Annual Accounts and also on the basis of the discussion with the Statutory Auditors/Internal Auditors of the Company from time to time, 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 for the year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that the Company has 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 as at 31st March, 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 were in place and that the financial controls were adequate and were operating effectively. f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. The Company's Internal Auditors have conducted periodic audit to provide reasonable assurance that the Company's established policies and procedures have been followed. The Audit Committee constituted by the Board reviewed the internal controls and financial reporting issues with Internal Auditors and Statutory Auditors. STATUTORY AUDIT & AUDITORS : The Statutory Auditors of the Company, M/s. Jain Singhal & Associates., Chartered Accountants, New Delhi (Firm Registration No.005839N), were appointed as Statutory Auditors by the members for three years. Their appointment would be ratified at the ensuing Annual General Meeting. The Report of the Auditors on the Financial Statements including relevant notes on the accounts for the Financial Year ended on 31.03.2016 are self-explanatory and therefore do not call for any further comments. During the year under review, the Auditors had not reported any matter under Section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed under Section 134(3) of the Act. INTERNAL AUDITORS The Board of Directors of your Company has re-appointed M/s. Vijay Sehgal & Co, Chartered Accountants, Delhi (Firm Registration No.000374N) as Internal Auditors pursuant to the provisions of Section 138 of the Companies Act, 2013 for the financial year 2016-2017. SECRETARIAL AUDITORS : The Board had appointed M/s Mahesh Gupta & Co., Practicing Company Secretaries, Delhi as Secretarial Auditors pursuant to the provisions of Section 204 of the Companies Act, 2013. The Report of the Secretarial Auditor is annexed to the Report as per Annexure 'A'. CORPORATE SOCIAL RESPONSIBILITY : In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has a Corporate Social Responsibility (CSR) Committee, which comprises Mr. M.G. Gupta, Chairman, Mr. R. K. Jain, Member and Mr. S.K. Kaushik, Member. The terms of reference of the Corporate Social Responsibility (CSR) Committee is provided in the Corporate Governance Report. Your Company has also formulated a Corporate Social Responsibility Policy (CSR Policy) which is available on the website of the Company at <http://www.flexfoodsltd.com/pdf/CSRPolicy.pdf>. The Company was required to spend an amount of Rs. 23.57 Lacs for the financial year 2015-16 on CSR out of which an amount of Rs. 19.58 Lacs was spent during the year.. The balance amount of Rs. 3.99 lacs will be spent in the future. Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure -"B" and forms integral part of this Report. CORPORATE GOVERNANCE : Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as prescribed under the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015. A separate Report on Corporate Governance along with Report on Management Discussion and Analysis is enclosed as part of this Report as Annexure 'C' & 'D' respectively. Disclosure under Companies Act, 2013 : (i) Extracts of Annual Return The details forming Part of the Extracts of Annual Return is annexed as per Annexure 'E'. (ii) Meetings During the year, Five Board Meetings and Four Audit Committee Meetings were convened and held. The details of which are given in Corporate Governance Report appended hereto. (iii) Composition of Audit Committee The Board has constituted a Audit Committee, which comprises of Mr. T.N. Pandey as the Chairman, Mr. M.G. Gupta, Mr. G.N. Gupta, Mrs. Anupam Ahuja and Mr. R.K. Jain as the Members. More details about the Committee are given in the Corporate Governance Report appended hereto. (iv) Related Party Transactions All related party transactions are negotiated on an arms-length basis and are in ordinary course of business. Therefore, the Provisions of Section 188(1) of the Companies Act, 2013 are not applicable. However, suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. The Related Party Transactions Policy as approved by the Board is uploaded on the Company's website www. flexfoodsltd.com <http://flexfoodsltd.com>. at the weblink <http://www.flexfoodsltd.com/> b2c-policy-on-related-party-transactions.php PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS Details of Loans, Guarantees and Investments covered under the Provisions of Section 186 of the Companies Act, 2013 are given in the accompanying Financial Statements. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS : There are no significant and material orders passed by any Regulator or Court, which would impact the going concern status of the Company and its future operations. INTERNAL FINANCIAL CONTROLS: A detailed note has been provided under Management Discussion and Analysis Report appended hereto. VIGIL MECHANISM AND WHISTLE BLOWER POLICY : Fraud-free and corruption-free work culture has been the core of the Company' functioning. In view of the potential risk of fraud and corruption due to rapid growth and geographical spread of operations, the company has put even greater emphasis to address this risk. To meet this objective, a Whistle Blower Policy has been laid down. The same policy as approved by the Board was uploaded on the Company's website www. flexfoodsltd.com at weblink <http://www.flexfoodsltd.com/pdf/> whistleblowerpolicy.pdf BOARD EVALUATION : Pursuant to the Provisions of the Companies Act, 2013 and under Securities & Exchange of Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the Board has carried out an Annual Performance Evaluation of its own performance and all the Directors individually. The evaluation of Non-Independent Directors, Chairman and the Board as a whole was done at a separate meeting by the Independent Directors. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 : Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. There were no complaint received from any employee during the financial year 2015-2016 and hence no complaint is outstanding as on 31.03.2016 for redressal. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT : There has been no material change and commitments occurred, between the end of the financial year of the Company i.e. 31st March, 2016 and the date of this report affecting financial position of the Company. RISK MANAGEMENT POLICY : Risk Management is a very important part of any business. Company's Risk Management Policy divides Risk into two broad categories; one Risk Associated at the Transactional Level and the other Risk Associated at the Decision Making Level. In respect of the Risk Associated at Transactional Level, the company has appropriate control mechanism and operating effectiveness of the Internal Financial Controls and Legal Compliance System. The company has created appropriate structures with proper delegation of duties and responsibilities of employee at each level on enterprise basis for compliances thereof. In respect of Risk Associated at Decision Making level like political, social & economic, market, technology, capitalstructure, foreign exchange & interest rate, they are evaluated before taking any strategic & financial decisions. Adequacy and operative effectiveness of the Internal Financial Control and Legal Compliance System are periodically reviewed by the Management, Internal Auditors, Statutory Auditors and the Audit Committee. INTERNAL POLICY ON REMUNERATION : The company has Internal Remuneration Policy for Directors, Key Management Personnel and Senior Management Personnel. The policy takes into account several factors like age, qualification, years of experience in the industry/ functional area and business management, present emoluments and other qualitative factors such as leadership qualities, communication skills, and performance track record. The aim is to ensure that the company attracts and retains competent people. SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES : The company does not have any subsidiary or Joint Venture. However, the company is associate company of UFLEX Limited. PARTICULARS OF EMPLOYEES : The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Member interested in obtaining a copy thereof, may write to the Company Secretary in this regard. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as per Annexure 'F'. ENERGY CONSERVATION, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO : The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed as "Annexure 'G'. PERSONNEL : Personnel relations with all employees remained cordial and harmonious throughout the year. Your Directors wish to place on record their sincere appreciations for the continued, sincere and devoted services rendered by all the employees of the Company. ACKNOWLEDGEMENT : The Directors express their gratitude and thanks to all the Institutions & Banks, Government Authorities where company's operations are carried out, Shareholders, Customers, Suppliers and other Business Associates for their continued co-operation and patronage. For & On behalf of the Board Ashok Chaturvedi Chairman (DIN 00023452) Place : NOIDA Dated : 26th.May, 2016 |