Your Directors have pleasure in submitting the 22nd Annual Report togetherwith the audited accounts of the Company for the year financial year ended March 31 2017.
Financial Results of the Company's operation for the year under review are as follows:
| || ||Rs in Lakhs |
|For the year ended March 31 ||2017 ||2016 |
|Net Profit before Depreciation & Taxation ||313.46 ||304.62 |
|Less : Depreciation ||58.66 ||67.55 |
|Provision for Deferred Taxation ||0.00 ||0.00 |
|Provision for Taxation / Written Off ||82.92 ||81.00 |
|Net Profit/(Loss) ||171.88 ||156.07 |
|Add : Balance from Last Year ||1735.46 ||1579.39 |
|Prior Period Profit adjustments ||0.00 ||0.00 |
|Less : Appropriation ||0.00 ||0.00 |
|Transfer to Reserves Profit / (Loss) carried to Balance Sheet ||1907.35 ||1735.46 |
Fiscal 2016 - 2017 was a year of progress in our journey and we increased investmentsin innovation advertising and sales coverage to enhance our long-term prospects forfaster sustainable sales growth. We stabilized top-line growth rates in several keymarkets. We delivered another strong year of productivity improvement and cost savings. Wemade significant steps in our portfolio transformation of cardiovascular and generalsurgery codes and streamlining the product line ups in our ongoing businesses. We madethis progress during a challenging year. We faced significant domestic slowdown in surgerybecause of demonetisation which reduced sales growth and core earnings. We faced slowingmarket growth and economic and political disruptions in many large markets. Earnings wereimpacted by reduced exports to Bangladesh and Nepal. Despite these challenges wedelivered sales growth within our initial guidance range and free cash flow productivitywas above our initial expectations.
The Company's reputation and the reputation of our brands form the foundation of ourrelationships with SURGEONS and suppliers. The quality and safety of our products arecritical to our business. Many of our brands have country wide recognition and ourfinancial success is directly dependent on the success of our brands. The success of ourbrands can suffer if our marketing and advertising plans or product initiatives do nothave the desired impact on a brand's image or its ability to attract SURGEONS.
Our market environment is highly competitive with global regional and localcompetitors. In many of the markets and industry segments in which we sell our productswe compete against other branded products. Additionally many of the product segments inwhich we compete are differentiated by price tiers. We are well positioned in the industrysegments and markets in which we operate often holding a leadership or significant marketshare position.
Your Company has been vigorously working to keep its surgeons abreast of technologicaladvancements through revamp and upgradation of atraumatic needles from Quality atraumaticneedles suppliers with latest technology so as to ensure better sustainability. YourCompany is working on a range of new atraumatic needles and combinations of atraumaticneedles and sutures products and services to consistently exceed SURGEONS expectations.This year CENTENIAL also emphasised on training its employees in PRODUCT THINKING forbetter and newer ways of marketing so as to foster a culture of innovation and substantialprogress. We already have a capable organization with immense trust and loyalty of oursurgeons. As we move ahead in our journey we may need swift adaptation and toughdecisions especially for evolving to a product portfolio that is more focused on latestatraumatic needles innovation. As we look ahead we see a year of continuing challengesbut at the same time we are geared up to make the company more efficient to take on thecurrent and future competitive challenges. We are convinced that your support andcooperation will strengthen CENTENIAL. I would also like to express my appreciation toeach of you for your support and understanding as we move on into the new financial yearwith great hope. The year under review witnessed a lot of challenges with growingcompetition and changes in surgeon's preference for atraumatic needles. Further details ofoperations are given in the management discussion and analysis report which forms part ofthis report.
I am also indebted to the Highly-Educated Members of the Board for their guidance andto the Honest Loyal and Committed Employees as always. Our values always guide usand our history and heritage as a Company in one word stands for trust service andhigh Quality. We have a brand name which stands for Quality Reliability CommitmentIntegrity and TRUST.
The Financial Statements have been prepared in accordance with Generally AcceptedAccounting Principles in India (Indian GAAP). These financial statements comply in allmaterial respects with the Accounting Standards notified under Section 133 of theCompanies Act 2013 (the Act) read together with paragraph 7 of the Companies(Accounts) Rules 2014 to reflect the financial position and the results of operations ofthe Company. The Financial Statements of Financial Year 2016 ~ 2017 together with theAuditor's Report form a part of this Annual Report.
In order to conserve resources for the operating business your Directors after dueconsideration of the financial accounts of the Company have not recommended any dividendto the equity shareholders.
Change in nature of business
There has been no change in the nature of business of the Company. Your Companycontinues to be a medical device company engaged in manufacturing surgical sutures &other medical devices with sales mainly in India.
Material changes and commitments affecting the financial position of the Company
There have not been any material changes affecting the financial position of theCompany between the end of the financial year and the date of this report.
The paid up equity share capital of the Company as on March 31 2017 was Rs.364.83Lakhs. During the year under review the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity.
The company has not accepted any fixed deposits from the public.
Directors and Key Managerial Personnel Retire by rotation
In accordance with the provisions of the Act and the Articles of Association of theCompany Shri Devraj T. Poojary (DIN:02041726) Executive Director of the Company retiresby rotation at the ensuing Annual General Meeting and being eligible have offered himselffor re-appointment.
The Board of Directors on the recommendation of the Nomination and RemunerationCommittee has reappointed Shri Devraj T. Poojary (DIN: 02041726) as Whole-time Director ofthe Company for a period of 3 (Three) years with effect from February 1 2017 subject toapproval of shareholders.
Shri Neel M. Vora (DIN: 07699873) who was appointed by the Board of Directors as anadditional Director of the Company with effect from January 9 2017 and who holds officeupto the date of this 22nd Annual General Meeting of the Company in terms ofSection 161 of the Companies Act 2013 (Act) and in respect of whom theCompany has received a notice in writing from a Member under Section 160 of the Actproposing his candidature for the office of Director of the Company be and is herebyappointed an Independent Non-Executive Director of the Company.
Independent Directors' Declaration
All Independent Directors have submitted the declaration of Independence as requiredunder Section 149(7) of the Companies Act 2013 confirming that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(Listing Regulations).
The Board has Independent Non-Executive Director based on fit & proper criteria ~qualification expertise track record integrity etc. With the enactment of the CompaniesAct 2013 (the Act') it is mandatory for every listed Company to appoint requisitenumber of Independent Directors' as defined in Section 149(6) of the Companies Act2013. The Company in compliance with the Listing Agreement has already appointed ShriSunil C. Modi [DIN : 03103966] Shri Bhushan S. Limaye [DIN : 00804930] Shri Jagadish B.Shetty [DIN : 00731896] and Shri Neel M. Vora (DIN: 07699873) as Independent Non-ExecutiveDirectors of the Company on the Board. The Board is of the opinion that the existingIndependent Directors fulfil the criteria as specified in Section 149 of the CompaniesAct 2013 & the Rules made thereunder.
Brief profile of the Directors proposed to be appointed / re-appointed and otherinformation as stipulated under Listing Regulations and Secretarial Standard 2 are part ofthe Notice attached to this Report.
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was preparedafter taking into consideration the various aspects of the Board's functioningcomposition of the Board and its Committees culture execution and performance ofspecific duties obligations and governance. The performance evaluation of the IndependentDirectors was completed. The performance evaluation of the Chairman and theNon-Independent Directors was carried out by the Independent Directors. The Board ofDirectors expressed their satisfaction with the evaluation process.
Managerial Remuneration Policy
The policy on appointment and remuneration of Directors and Key Management Personnelprovides an underlying basis and guide for human resource management thereby aligningplans for strategic growth of the Company. While deciding on the remuneration forDirectors and Key Management Personnel the Board and the Nomination and RemunerationCommittee consider the performance of the Company the current trends in the industry thequalifications of the appointee(s) their experience past performance and other relevantfactors. The policy is pursuant to Section 178(4) of the Companies Act 2013 and clause49(IV) (B) (4) of the Listing Agreement.
Loans Guarantees or Investments
Loans guarantees and investments (if any) covered under Section 186 of the CompaniesAct 2013 form part of the notes to the financial statements.
Meetings of the Board
The meetings of the Board are scheduled at regular intervals to decide and discuss onbusiness performance policies strategies and other matters of significance. Theschedules of the meetings are circulated in advance to ensure proper planning andeffective participation in meetings. In certain exigencies decisions of the Board arealso accorded through circulation. During the financial year 2016 ~ 2017 the Board ofDirectors of the Company met 04 (Four) times.
Pursuant to the requirements of Schedule IV to the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate Meeting ofthe Independent Directors of the Company was also held on February 13 2017 without thepresence of non-independent directors and members of the management to review theperformance of non-independent directors and the Board as a whole the performance of theChairperson of the company and also to assess the quality quantity and timeliness of flowof information between the company management and the Board.
Committees on Board
The Board of Directors has the following Committees:
1. Audit Committee
2. Remuneration and Nomination Committee
3. Committee of Directors (Stakeholders' Relationship Committee)
Directors Responsibility Statement
In Compliance with Section 134(5) of the Companies Act 2013 the Board of Directorshereby 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 and ofthe 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 the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) The Directors had prepared the annual accounts on a going concern basis;
(e) The Company is responsible for establishing and maintaining adequate and effectiveinternal financial controls with regard to its business operations and in the preparationand presentation of the financial statements in particular the assertions on theinternal financial controls in accordance with broader criteria established by theCompany. Towards the above objective the Directors have laid down internal financialcontrols based on internal controls framework established by the Company which in allmaterial respects were operating effectively as at March 31 2017.
(f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively. TheCompany has substantially complied with material provisions of such acts and regulationsas are relevant for its operations.
Related Party Transactions
Transactions with related parties are in the ordinary course of business and also onarms' length pricing basis.
Prior omnibus approval from the Audit Committee are obtained for transactions which arerepetitive and also normal in nature. Further disclosures are made to the Audit Committeeand the Board of Directors on a quarterly basis. There have been no material related partytransactions undertaken by the Company under Section 188 of the Companies Act 2013 andhence no details have been enclosed pursuant to clause (h) of subsection (3) of Section134 of Companies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014AOC-2'.
Messrs. A. Vijay Kumar & Co. Chartered Accountants Firm Registration No.009824Swho are Statutory Auditors of the Company shall hold office till the conclusion of theforthcoming 22nd Annual General Meeting (AGM) and are eligible forre-appointment pursuant to the provisions of Section 139 of the Companies Act 2013 andthe Rules framed there under it is proposed to appoint Messrs A. Vijay Kumar & Co.Chartered Accountants as Statutory Auditors of the Company pursuant to the provisions ofSections 139 of the Companies Act 2013 read with Rule 6 of the Companies (Audit andAuditors) Rules 2014 the retiring Statutory Auditors to be appointed as Auditors of theCompany to hold office from the conclusion of this 22nd AGM till the conclusionof the 23rd Annual General Meeting of the Company to be held in the year 2018(subject to ratification of their appointment at every AGM) at such remuneration plusservice tax out of pocket expenses as may be mutually agreed between the ManagingDirector of the Company and the Auditors. They have given a certificate to the effect thatthe reappointment if made would be within the limits prescribed under Section 139 of theCompanies Act 2013. Your Directors recommend their re-appointment. There are noqualifications reservations or adverse remarks or disclaimers made by the StatutoryAuditors in their report.
Messrs H. S. Associates Company Secretaries were appointed to conduct the secretarialaudit of the Company for Financial Year 2016 ~ 2017 as required under Section 204 of theCompanies Act 2013 and rules thereunder. The secretarial audit reports for Financial Year2016 ~ 2017 forms the part of the Annual Report as Annexure A of the Director's Report.The Board has appointed Messrs H. S. Associates Company Secretaries as SecretarialAuditor of the Company for Financial Year 2016 ~ 2017. The Company is in the process ofappointing a Company Secretary as required pursuant to provisions of Section 203 and otherapplicable provisions of the Companies Act 2013 and Companies (appointment andRemuneration of Managerial Personnel) Rules 2014. There is no secretarial auditqualification for the year under review.
Particulars of employees
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is as perAnnexure D.
Corporate Governance Code
The Company falls under the criteria 15(2) (a) of the SEBI (Listing Obligations &Disclosure Requirements) (LODR) Regulations 2015 as the Paid up capital of the Companywas below Rs.10.00 Crores and Net Worth was below Rs.25.00 Crores as on the last day ofthe previous financial year. As on March 31 2017 the Company's Paid up Capital is ofRs.54242500.00 (Rupees Five Crores Forty Two Lakhs Forty Two Thousand Five HundredOnly) and Net worth is of Rs.244977331.00 (Rupees Twenty Four Crores Forty Nine LakhsSeventy Seven Thousand Three Hundred Thirty One Only). Hence compliance with CorporateGovernance provisions as per SEBI (LODR) Regulations 2015 are not applicable to theCompany.
Management discussion and analysis
Management's Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is presented in aseparate section forming part of the Annual Report.
Policy on Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and Rules thereunder. An InternalComplaints Committee has been constituted to inquire into complaints of sexual harassmentand recommend appropriate action. During the year under review the Internal ComplaintsCommittee has not received any complaint of sexual harassment.
Conservation to energy technology absorption foreign exchange earnings & outgo
The particulars as prescribed under Sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 are enclosed as Annexure B tothe Director's Report. Your Company continuous to focus on research and developmentactivities towards the upgradation of technology development testing and certificationof atraumatic needles and sutures for conformity to new Indian / International standardsand export market. The Company has installed new machinery designed to its specialrequirements and has been able to save in cost of production and also manufacture productsto various surgeons specifications. Besides development work for several new product codesfor exports has been undertaken. Emphasis on new product codes development and processimprovement will continue to be the priority areas of our research and developmentactivity enhancement in quality and service to our customer.
Extract of Annual Return
An extract of the Annual return has been annexed as Annexure C to the Director's Reportin compliance with Section 92 of the Companies Act 2013 read with applicable Rules madethereunder.
Internal Control Systems and their Adequacy
The Company has an adequate Internal Control System commensurate with the size scaleand complexity of its operations. Messers Mahesh Chandra and Associates CharteredAccountants are appointed with scope of the Internal Audit (IA) duly approved by theAudit Committee. To maintain its objectivity and independence the Internal Auditorreports to the Audit Committee. The Internal Auditor evaluates the adequacy of theinternal control system in the Company on the basis of Statement of Operations Procedureinstruction manuals accounting policy and procedures.
Whistle Blower Policy / Vigil mechanism
The Company has implemented a whistle blower policy whereby employees Directors andother stakeholders can report matters such as generic grievances misconductmisappropriation of assets and non-compliance to code of conduct to the Company. Thepolicy safeguards the whistle blowers to report concerns or grievances and also providesdirect access to the Chairman of the Audit Committee.
In view of the numerous compliances applicable to the Company the present premisebeing inadequate the Sales and Administration Office will be moving to additionalpremises leased from Ms. Anuradha Kashikar.
People and Safety
CENTENIAL values all our employees and makes effort through Quality of work life tohelp their growth. Your Company has always placed emphasis on our people and safety atworkplace. Industrial relations in the Company were cordial throughout the business yearunder review.
Environment and safety
The Company accords the highest priority for maintaining safety standards and apollution-free environment.
Transfer of Unpaid and Unclaimed Amounts to IEPF
Pursuant to the provisions of Section 124(5) of the Companies Act 2013 dividend whichremains unpaid or unclaimed for a period of seven years from the date of its transfer tounpaid dividend account is required to be transferred by the Company to Investor Educationand Protection Fund (IEPF) established by the Central Government under the provisions ofSection 125 of the Companies Act 2013. Since no dividend has been paid this Section isnot applicable to our company.
Subsidiaries and Joint ventures
The Company has no subsidiary and not entered in joint ventures.
Employee Stock Option Plan (ESOP)
The Company does not have an Employee Stock Option Plan (ESOP').
Research and Development
The Company's research & development activities continue to be directed towards upgradation of technology and development of new product codes and packaging lines. YourCompany's commitment is to meet and exceed those expectations.
CRISIL continued to reaffirm their rating of BBB / Stable andA3+ for various banking facilities throughout the year enabling your Companyto avail facilities from bank(s) at attractive rates indicating a very strong degree ofsafety for timely payment of financial obligations.
ISO 9001 : 2015 and ISO 13485 : 2016 Certification
Our Company is ISO 9001:2015 and ISO 13485 : 2016 certified and the stringentISO 9001:2015 and ISO 13485 : 2016 system means effective control over every step toachieve true Quality Assurance for our products.
Your Directors would like to express their appreciation for the assistance andco-operation received from the Food and Drugs Administration Banks GovernmentAuthorities Surgeons Hospitals Nursing homes the committed services by our ExecutivesStaff and Employees to the members of the Board for their guidance who contributed to thesuccess of our Company.
| ||By Order of the Board of Directors |
| ||For CENTENIAL SURGICAL SUTURE LTD |
| ||Sd/- |
| ||Vijay MAJREKAR |
|Place of Signature : Mumbai Maharashtra ||Managing Director |
|Date: August 19 2017 ||DIN: 00804808 |
Annexure B Particulars as per Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014.
A. CONSERVATION OF ENERGY
Energy conservation is a continuous process and is one of the prime areas for controlof cost. Steps taken by the Company are as under :
(a). The steps taken or impact on conservation of energy : Due to measures taken inprevious year (2016 ~ 2017) this year also the power factor of F-29 and B-17 facilitieswas maintained at the lowest consumption resulting in lower monthly electricity bills. TheAir Conditioners set off point was maintained at 240C.
(b). Additional investments and proposals if any being implemented for reduction ofconsumption of energy:
Procurement and installation of LED fittings for all the areas were made operative inthis year.
Provision for capacitor bank for newly installed packaging and sealing machines tomaintain power factor and reduce line current.
On-going activities are being taken for energy conservation.
(c). Impact of measures at (a) & (b) above for reduction of energy consumption& consequent impact on the cost of production of goods :
The above measures have resulted in reduction of Energy consumption.
New machines got added in the year 2016 - 2017 as compared to 2015 ~ 2016 at ourfacility.
Though the above activities have added the total connected load of the facilities theactual consumption of KWH will be less in comparison with that of year 2015 ~ 2016. (d).Total Energy Consumption at the facilities is as follows :
|1). Electricity Consumption || || |
|a) Purchased units ||230075 ||235747 |
|Total Amount (Rs in Lakhs) ||23.44 ||21.13 |
|Rate/unit ||10.18 ||8.96 |
|Consumption/unit of production ||N.A. ||N.A. |
|b). Own Generation || || |
|Through Diesel Generator : || || |
|Units ||2420 ||2860 |
|Total Amount (Rs in Lakhs) ||1.02 ||0.72 |
|Cost/Unit ||42.04 ||25.21 |
|Consumption/unit of production ||N.A. ||N.A. |
|2). Furnace Oil ||N.A. ||N.A. |
|3). Coal (specify quality) ||N.A. ||N.A. |
|4). Others (specify) ||N.A. ||N.A. |
B. Technology absorption
Research and Development (R&D)
1. Specific areas in which Research & Development (R&D) is being carried out bythe Company :
In-house Research and Development work is carried out to develop new process forpackaging including standardizing/optimising to reduce power consumption.
2. Benefits derived as a result of the above R&D :
Development of process reduced the time for packaging and introducing number of newproduct codes.
3. Future plan of action:
The Company will carry on R&D activities to improve existing packaging linesprocesses of existing product codes and develop new products.
4. Expenditure on R&D : Capital : NIL
Recurring : Expenses incurred are charged to normal heads and not allocated separately.Total : Not determinable Total R & D expenditure as percentage of total expenditure :Not determinable
C. Foreign Exchange Earnings & Outgo
During the year foreign exchange outgo was `654.60 lakhs (Previous Year `887.26 lakhs).The foreign exchange earned during the year was `275.00 lakhs (Previous Year `130.16lakhs).