Your Directors have pleasure in presenting the Twenty Sixth Annual Report together withthe Audited financial statements for the year ended 31st March 2017.
1. REVIEW OF PERFORMANCE:
(Amount in Lakhs)
|Particulars ||Current Year 31.03.2017 ||Previous Year 31.03.2016 |
|Income (Including Other Income) ||3366.36 ||4515.32 |
|Expenses (Including exceptional items) ||3060.59 ||4234.68 |
|Profit/(Loss) before Interest Depreciation & Tax (PBIDTA) ||305.77 ||280.64 |
|Finance Charges ||110.81 ||64.03 |
|Depreciation & amortization ||128.70 ||115.48 |
|Net Profit/(Loss) Before Tax ||66.26 ||101.12 |
|Provision for tax including Deferred Tax ||21.09 ||15.25 |
|Net Profit/(Loss) after tax ||45.17 ||85.87 |
|Add / (Less): Share of Profit / (Loss) on Associate Companies ||- ||- |
|Add / (Less): Minority Interest - Share of Profit / (Loss) ||- ||- |
|Net Profit / (Loss) ||45.17 ||85.87 |
|Basic ||0.94 ||1.78 |
|Diluted ||0.94 ||1.78 |
2. OPERATIONAL REVIEW:
During the year under review the company has achieved turnover of Rs. 33.67 Crores ascompared to Turnover of Rs. 45.15 Crores achieved during the last financial year andconsecquently there is decline profits of the company corresponding to decline inturnover. During the financial year company continued the contract manufacturing of"Eclairs" for M/s. Mondelez Foods India Pvt Ltd and "Pulse" forDharampal Satyapal (DS) Group. Candy sales are on the fast track but the chocolate eclairand soft toffee category is struggling because margins are low due to the premium natureof the product which is main cause for decline in turnover of the company.
Mondelez International commissioned the first phase of its largest Asia-Pacificmanufacturing facility coming up in Andhra Pradesh's Sri City. The factory that has beenset up with an initial investment of $190 million is the seventh in India for the maker ofCadbury Dairy Milk chocolates this has affected companies contract volume with the M/s.Mondelez Foods India Pvt Ltd
Your company has been looking for alternate contracts to compensate the lesser volumesfrom M/s. Mondelez Foods India Pvt Ltd and your directors are happy inform company hasentered into Loan License agreement with M/s Divya Pharmacy a business undertaking ofDivya Yog Mandir Trust part of Patanjali Group one of the fast growing FMCG of theCompany for manufacturing of "Divya Cough Drops".
Further Company has also entered into Manufacturing Contract with M/s Patanjali AyurvedLimited in March 2017 for Hard Boiled Candy - Kacha Aam Hi Kick and is hopeful of clockingthe turnover of around 20 Crores to begin with during the approaching financial year.
Your directors do not recommend any dividends for the financial year 2016-17 asprofits are planned to be ploughed back into the business operations of the Company.
Your Company has not accepted any deposits during the year falling under Section 73 ofthe Companies Act 2013 and Companies (Acceptance of Deposits) Rules 2014.
5. SUBSIDIARY/ASSOCIATE COMPANIES:
Your Company did not have any subsidiary or Associate Company during the financial yearended on 31st March 2017.
In accordance with the provisions of Section 136 of the Companies Act 2013 the auditedfinancial Statements and related information of the Company are available on our website.The said information is also available for inspection at the Registered Office of thecompany during business hours and separate of copy of such statements will be provided atthe request of the members.
6. PARTICULARS OF EMPLOYEES:
The information as required under the provisions of Section 197(12) of the CompaniesAct 2013 read with Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 as amended from time to time is attached herewith as Annexure 1.
7. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Directors of your Companyhereby confirm that:
a) In the preparation of Annual Accounts for the year ended 31st March2017 the applicable accounting standards have been followed along with the properexplanation relating to material departures if any there from;
b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give true andfair view of the state of affairs of the Company at the end of the financial year ended 31stMarch 2017 and of the profit and loss of the Company for that period;
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;
d) The Directors have prepared the annual accounts on a going concern basis.
e) The directors had laid down internal financial controls by the Company and that suchinternal fianancial controls are adequate and operating effectively; and
f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
8. BOARD MEETINGS BOARD OF DIRECTORS KEY MANAGERIAL PERSONNEL & COMMITTEES OFDIRECTORS:
I) Board Meetings:
The Board of Directors of the Company met 07 times during the year 2016-17. The gapintervening between two meetings of the board is as prescribed in the Companies Act 2013.The detail of number of meetings attended by each director is as follows:
|Names of Directors || |
| ||22.04.2016 ||30.05.2016 ||12.08.2016 ||03.10.2016 ||14.11.2016 ||14.02.2017 ||20.03.2017 |
|B K Gurbani ||Yes ||Yes ||Yes ||Yes ||Yes ||Yes ||Yes |
|Meera B Gurbani ||Yes ||Yes ||Yes ||Yes ||Yes ||Yes ||Yes |
|Banala Jayaprakash Reddy ||No ||Yes ||Yes ||No ||Yes ||Yes ||No |
|Umra Singh Sirohi ||Yes ||Yes ||Yes ||Yes ||Yes ||Yes ||Yes |
ii) Changes in Directors & Key Managerial Personnel:
During the year there were no changes in the composition of the Board of Directors.
Mr. Vishal Ratan Gurbani was appointed as Additional Director on the Board w.e.f 21stAugust 2017 under section 161 of Companies Act 2013 and he hold the office up tothe date of ensuing AGM. Further company is in receipt of notice U/s 160 of the actproposing his candidature for appointment as director of the company and the Board ofDirectors of your Company after reviewing the provisions of the Act are of the opinionthat Mr. Vishal Ratan Gurbani is eligible for being appointed as Director Hence recommendhis appointment.
Mrs. Meera Gurbani Director of the company retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offer herself for re-appointment.
iv) Independent Directors:
The following Independent Directors who were appointed at the 23rd AnnualGeneral Meeting held on 27th September 2014 for a period of Five (5) yearswill continue to be on the Board till the conclusion of Annual General Meeting to be heldin the calendar year 2019.
1. Mr. Banala Jayaprakash Reddy
2. Mrs. Umra Singh Sirohi
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Act that they meet the criteria of independence aslaid down in Section 149(6) of the Act.
v) Board Committees:
The Company has the following Committees of the Board:
(a) Audit Committee:
The primary objective of Audit Committee is to monitor and provide effectivesupervision of the management's financial reporting process with a view to ensureaccurate timely and proper disclosures and transparency in financial reporting. TheCompany has a qualified and independent Audit Committee comprising of Independent &Promoter Directors. The Chairman of the Committee is an Independent Director.
Audit Committee of your Company as on date consists of following Non-executiveIndependent Directors: _
|1. Mr. Banala Jayaprakash Reddy ||Chairman |
|2. Mrs. Umra Singh Sirohi ||Member |
|3. Mrs. Meera Gurbani ||Member |
The committee met Four times during the financial year 30.05.2016 12.08.201614.11.2016 and 14.02.2017 attendance of each Member of Committee is as follows.
|S. No. ||Names of the Member ||Designation ||No. of Meetings held ||No. of Meetings attended |
|1 ||Banala Jayaprakash Reddy ||Chairman ||4 ||4 |
|2 ||Meera Gurbani ||Member ||4 ||4 |
|3 ||Umra Singh Sirohi ||Member ||4 ||4 |
Terms of Reference:
The recomendation for appointment remuneration and terms of appointment ofauditors of the Company.
Review and monitor the auditor's independence and performance and effectivenessof audit process.
Examination of the financial statement and auditor's report thereon.
Approval or any subsequent modification of transaction of the company withrelated parties.
Scrutiny of intercorporate loans and investments.
Valuation of undertakings or assets of the company wherever it is necessary.
Evaluation of internal financial control and risk management systems.
Monitoring the end use of funds and related matters.
Others task as may be assigned by the board.
Review of information:
a) Management discussion and analysis of financial condition and results of operations;
b) Statement of significant related party transactions as defined by the Committeesubmitted by the management;
c) Management letters/letters of internal control weaknesses issued by the statutoryauditors;
d) Internal audit reports relating to internal control weaknesses; and
e) The appointment removal and terms of remuneration of the Chief Internal Auditor.
Audit Committee Recommendation:
During the year all the recommendations of the Audit Committee were accepted by theBoard.
(b) Nomination and Remuneration Committee:
Brief description of terms of reference:
The Nomination and Remuneration Committee is vested with the powers relating toformulating the criteria for determining qualifications positive attributes independenceof directors and recommend to the board a policy relating to the remuneration of thedirectorsm Key Managerial Employees and other employees.
The Committee shall also identify & screen candidates who qualify to becomedirectors and may be appointed in senior management with the criteria laid downevaluation of director's performance approving and evaluating the compensation planspolicies and programs for executive directors and senior managements.
The Nomination & Remuneration Committee constitutes of following directors:
|1. Mr. Banala Jayaprakash Reddy ||Chairman |
|2. Mrs. Meera Gurbani ||Member |
|3. Mrs. Umra Singh Sirohi ||Member |
Meetings and Attendance during the year:
The committee met One time during the financial year on 30.05.2016 attendance of eachMember of Committee is as follows.
|S. No. ||Name of the Members ||Designation ||No. of Meetings held ||No. of Meetings attended |
|1 ||Banala Jayaprakash Reddy ||Chairman ||1 ||1 |
|2 ||Meera Gurbani ||Member ||1 ||1 |
|3 ||Umra Singh Sirohi ||Member ||1 ||1 |
Remuneration Policy and details of remuneration paid to the Directors:
The policy framed by the Nomination and Remuneration Committee under the provisions ofSection 178(4) of the Act is as below:
The remuneration policy of the Company has been so structured in order to match themarket trends of the confectionery industry. The Board in consultation with the Nominationand Remuneration Committee decides the remuneration policy for Directors. The Company hasmade adequate disclosures to the members on the remuneration paid to Directors from timeto time. Remuneration/ Commission payable to Directors is determined by the contributionsmade by the respective Directors for the growth of the Company.
Presently the Non-Executive Directors do not receive any remuneration from the Companyexcept sitting fees.
The aggregate value of salary and perquisites for the year ended 31.03.2017 to ManagingDirector is as under:
|Name ||Designation || |
Remuneration paid/to be paid for Financial year 2016-17 (in C.)
| || ||Salary & Perks ||Commissi on ||Total |
|B K Gurbani ||Chairman & Managing Director ||15.00 Lakhs ||- ||15.00 Lakhs |
(C) Stakeholders Relationship Committee:
Composition of Stakeholders Relationship Committee is as follows:
|1. Meera B Gurbani ||- ||Chairman |
|2. Banala Jayaprakash Reddy ||- ||Member |
The role of Stakeholders' Relationship Committee is as follows:
1. Considering and resolving the grievances of shareholders of the Company with respectto transfer of shares non-receipt of annual report non-receipt of declared dividendetc;
2. Ensuring expeditious share transfer process in line with the proceedings of theShare Transfer Committee;
3. Evaluating performance and service standards of the Registrar and Share TransferAgent of the Company;
vi) Vigil Mechanism:
The Company has established a whistle-blower policy and also established a mechanismfor Directors and employees to report their concerns.
Whistle Blower Policy:
The Company has established a mechanism for employees to report concerns aboutunethical behaviors actual or suspected fraud and violation of Code of Conduct of theCompany etc. The mechanism also provides for adequate safeguards against victimization ofemployees who avail the mechanism and also provides for direct access to the Chairman ofthe Audit Committee. We affirm that during the Financial Year 2016-17 no employee hasbeen denied access to the Audit Committee.
vii) Related Party Transactions:
The related party transactions that were entered into during the financial year were onan arm's length basis and there no material related party transactions made by the Companywith Directors and other related parties which may have potential conflict with theinterest of the company.
Details of the related party transactions as required pursuant to clause (h) ofsub-section (3) of section 134 of the Companies Act 2013 and Rule 8(2) of the Companies(Accounts) Rules 2014 is attached herewith as Annexure - 2.
At the 23rd Annual General Meeting held on 27th September 2014M/s. RRK & Associates. Chartered Accountants were appointed as Statutory Auditors ofthe Company to hold office till the conclusion of the Annual General Meeting to be held inthe year 2019. In terms of the first proviso of Section 139 of the Companies Act 2013 andthe Rules framed there under the appointment of the Auditors shall be placed for theratification at every AGM and members to authorize the Board of Directors to fix theirremuneration. Accordingly the appointment of M/s. RRK & Associates as StatutoryAuditors of the Company is placed for ratification by the Shareholders.
The Auditors' Report for fiscal 2017 does not contain any qualification reservation oradverse remark. The Auditors' Report is enclosed with the financial statements in thisannual report.
10. SECRETARIAL AUDITORS:
In accordance with the provisions of Section 204 of the Companies Act 2013 and as ameasure of good corporate governance practice the Board of Directors of the Companyappointed M/s. V K Bajaj & Associates Practicing Company Secretaries to conductSecretarial Audit of the Company for the Financial Year 2016-17. The Secretarial AuditReport for Financial year 2016-17 is herewith appended as Annexure 3 to the Board's reportWith reference to remarks of secretarial auditors regarding appointment of CompanySecretary as Key Managerial Person your Board of Directors would like to bring to yourkind notice that Company is putting all efforts to recruit a Company Secretary at theearliest.
With regards to advances to sister concerns Board would like to inform you that thoseadvances are given in the ordinary course of business.
11. SIGNIFICANT AND MATERIAL DISORDERS:
There are no significant and material disorders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in the future.
12. EXTRACT OF ANNUAL RETURN:
In accordance with Section 134(3)(a) of the Companies Act 2013 and extract of AnnualReturn in Form MGT 9 is annexed herewith as Annexure 4 to the Boards' Report.
13. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS U/S 186:
Company has neither made any investments nor given any guarantee during the financialyear except outstanding advances to the Associate Companies.
14. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The particulars as prescribed under Section 134(3)(m) of the Act read with Rule 8 ofthe Companies (Accounts) Rules 2014 are set out in the Annexure 5 to this Report.
15. PERFORMANCE OF THE BOARD OF DIRECTORS ITS COMMITTEES AND INDIVIDUAL DIRECTORS:
In accordance with Section 134(3)(p) of the Companies Act 2013 and Rule 8(4) of theCompanies (Accounts) Rules 2014 your Directors have reviewed and evaluated theperformance of the Board of Directors and their committees along with performance ofindividual Director in the light of Company's performance. The performance of theDirectors individually and collectively and performance of committees are foundsatisfactory.
With the spirit of wealth creation for the shareholders of the Company your Directorsare committed to give their best efforts towards the development of the Company.
16. MANAGEMENT DISCUSSION & ANALYSIS REPORT :
As per Regulation 34 (2) and para B of Schedule V of the SEBI (Listing Obligations& Disclosre Requirements) Regulations 2015 Management Discussion and Analysis reportis attached and forms part of this report as Annexure 6.
17. RISK MANAGEMENT:
Risks are events situations or circumstances which may lead to negative consequenceson the Company's businesses. Risk management is a structured approach to manageuncertainty. A formal enterprise wide approach to Risk Management is being adopted by theCompany and key risks will now be managed within a unitary framework.
18. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The company has in place an Anti Sexual Harassment policy in line with the requirmentof the Sexual Harassment women at work place (Prevention Prohibition and Redressal) Act2013. The internal complaints comittee ("ICC") has been setup to redress thecompalints received regarding sexual harrasment. All employees are covered under thispolicy.
During the year there were no complaints referred to the ICC.
Your Directors have pleasure in recording their appreciation for the assistanceextended to the Company by various officials of the Central and State Governments andCommercial Banks.
Your Directors would also like to place on record their sincere appreciation andgratitude to the Shareholders Investors Suppliers Bankers for their support andco-operation. Your Directors express their heartfelt gratitude to the employees for theirexceptional commitment and loyalty to the Company.
| ||By the Order of the Board || |
| ||For SAMPRE NUTRITIONS LIMITED || |
| ||Sd/- ||Sd/- |
| ||B K GURBANI ||MEERA GURBANI |
|Place : Medchal ||Chairman & Managing Director ||Director |
|Date : 21.08.2017 ||DIN:00318180 ||DIN:00318319 |