Your Directors are pleased to present the Thirty-second Annual Report together withAudited Financials Statements for the year ended 31st March 2016.
1. KEY FINANCIAL HIGHTLIGHTS
|Highlights ||FY 2015-16 ||FY 2014-15 |
|Revenue from operations ||20876.23 ||17815.72 |
|Profit before Depreciation Interest and Tax ||3434.96 ||2614.59 |
|Profit after tax ||1611.99 ||1079.37 |
|Earnings per share (Rs./share - Basic and diluted) ||62.79 ||42.04 |
|Net Fixed Assets ||6145.27 ||6096.82 |
|Long term borrowings (excluding current portion) ||1974.35 ||2122.52 |
|Appropriations || || |
|Dividend on Preference Shares ||0.60 ||0.60 |
|Dividend on Equity shares ||51.32 ||25.66 |
|Tax on Dividend ||10.57 ||5.25 |
|Profit/ (Loss) transferred to Balance Sheet ||4395.16 ||2845.66 |
2. FINANCIAL PERFORMANCE & OPERATIONS :
Your Company grew at a healthy Y-O-Y rate of 17.2% to achieve revenues of Rs. 208.8Crore during the year against Rs. 178.2 Crore in the previous financial year. The exportsled Consumer Business grew 21.3% to Rs. 130.8 Crore against Rs. 107.8 Crore in theprevious year while the Tasty Bite Food Service (TFS) business registered a growth of10.7% with revenues of Rs. 64.9 Crore against Rs. 58.7 Crore in the previous year.
Tasty Bite continues to retain in position of market leadership in its key marketsincluding the US Canada Australia and New Zealand. The Company is also preparing for alaunch into new strategic markets such as the United Kingdom and Japan.
Profit after Tax for the year ended at Rs. 16.12 Crore against Rs. 10.79 Crore in FY15.
The Board of Directors at their meeting held on May 7 2016 recommended a finaldividend of Rs. 2 per equity share (20% on the face value of Rs. 10 each) subject to theapproval of shareholders at the ensuing Annual General Meeting.
In addition to the above the Company has provided for a preferential dividend of Rs.59530/- on its 59530 1% non-cumulative non-convertible Redeemable Preference Shares ofRs. 100/- each for the financial year 2015-16.
The total dividend payout on equity shares would involve a cash outgo of Rs. 51.32 lacsand dividend tax of Rs.10.44 lacs. Dividend payout on preference shares is of Rs.0.60 lacsand dividend tax of Rs. 0.12 lacs.
Upon declaration by the members at the ensuing Annual General Meeting dividend shallbe paid to those members whose names appear on the Register of Members of the Companyafter effecting all valid share transfers in physical form lodged with the Company or itsRegistrar & Transfer Agents on or before Friday August 26 2016. In respect of sharesheld in dematerialized form dividend will be paid on the basis of particulars ofbeneficial ownership furnished by Depositories as on the closing hours of business onFriday August 26 2016.
4. RESEARCH AND DEVELOPMENT :
Tasty Bite Research Centre (TBRC) located within the factory campus continued to buildon its mission to be a centre of excellence in product process and ingredient innovation.During the course of the year several new innovative products were developed by TBRCkeeping in mind the evolving needs of our consumers.
The Department of Science & Industrial Research (DSIR) of the Union Ministry ofScience & Technology renewed its accredition to TBRC during the year till March 2019.
New products developed at TBRC in the last 2 years contributed 21% of the company'srevenues.
5. OPEN OFFER BY KAGOME CO LTD :
Pursuant to the acquisition of Preferred Brands International Inc. by Kagome Co Ltd.(''Kagome'') a Japanese Company the ownership structure of the Company was modified.Kagome Co Ltd qualified as an ''Acquirer" under the SEBI (Substantial Acquisition ofShares and Takeover) Regulations 2011 and on April 14 2015 made an open offer to acquireshares of the Company. The open offer was completed on December 23 2015. Kagome acquired300 shares from public for a consideration of INR 198720 amounting to 0.01 % of theCompany's total share capital through open offer. The share transfer was completed andKagome was added as a "promoter" with effect from February 17 2016. Kagome CoLtd hence forms part of Promoter/ Promoter group.
6. FINANCE :
Your Company continues to have stable long term and working capital funding in place.The management is pleased to inform that ICRA Limited has upgraded its previouslyassigned long term rating of ICRA BBB+ (pronounced as ICRA triple B plus) with a stableoutlook to ICRA A- (pronounced as ICRA A minus) with stable outlook and short term ratingof ICRA A2+ (pronounced as ICRA A two plus) to ICRA A1 (pronounced as ICRA A one).
During the year Company availed an External Commercial Borrowing (ECB) of USD 3.4Million from Mizuho Bank Limited (Mizuho) to prepay the Foreign Currency Term Loanavailed from Kotak Mahindra Bank Limited (Kotak). Kotak continues to provide workingcapital facility of Rs. 11.00 Crore to the Company. The Company also established a workingcapital credit facility of USD 1 Million from Mizuho Bank Limited. The Company continuesits relationship with Ratnakar Bank Limited (RBL) for working capital requirements with afacility limit of Rs. 10.00 Crore.
The Company also received approval for an ECB of USD 2.5 Million from The Bank of TokyoMitsubishi UFJ Ltd (MUFG) for expansion of its manufacturing capacity. It has alsoestablished a working capital facility of INR 10 crore from MUFG.
The Company continues to successfully repay as per schedule of USD 50000 per quarterof ECB of USD 1 Million availed from Preferred Brands International Inc. Final payment ofthis ECB will be completed by December 2016.
Total long term borrowing (excluding current portion) stood at Rs. 19.74 Crore as of31st March 2016 against Rs. 21.22 Crore as of 31st March 2015.
7. FIXED DEPOSITS :
The Company has not accepted or invited any deposits from the public during the yearunder review.
8. DIRECTORS :
There were following changes in Board of Directors of the Company during the year underreview -
1. Mr. K P Balasubramaniam resigned from directorship of the Company due to othercommitments w.e.f. May 18 2015.
2. Mrs. Sucharita Hegde was appointed as additional director w.e.f. August 15 2015however her term as additional director ended on September 14 2015 at Annual GeneralMeeting and ceased to act as director. She was re-appointed as additional director w.e.f.October 12 2015. Proposal for her regularization as director and further appointment asIndependent Director for a term of 5 years is placed before the members in Notice callingAGM.
3. Mrs. Meera Vasudevan non-executive director of the Company resigned w.e.f. February10 2016 due to reconstitution of Board as agreed with Kagome during global alliance.
4. Mr. Masahiro Sumitomo was appointed as additional director of the Company w.e.fFebruary 10 2016. Proposal for his regularization as director is placed before theMembers in Notice calling AGM.
All independent directors have provided declaration stating their independence underthe provisions of section 149 of Companies Act 2013 ("Act") and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ("LODR").
In accordance with the provisions of the Companies Act 2013 and Memorandum andArticles of Association of the Company Mr. Ashok Vasudevan retires by rotation at theensuing Annual General Meeting and being eligible has offered himself for reappointment.
Mr. Sohel Shikari was appointed as an Alternate Director to Mr. Ashok Vasudevan duringthe year due to absence of Mr. Ashok Vasudevan from India. Previously he acted as anAlternate to Mrs. Meera Vasudevan till she resigned as director from the Board.
Board evaluation :
Pursuant to provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board carried out evaluation of its ownperformance individual performance of the directors as well as the respective Committees.Evaluation of Chairman was also carried out. The manner of evaluation is mentioned inCorporate Governance Report.
Remuneration & Evaluation Policy :
The Board on recommendation of Nomination & Remuneration Committee adopted'Remuneration and Evaluation Policy' for selection appointment and remuneration ofDirectors and Senior Management Personnel. Necessary diversity in the board was ensured.Detailed policy has been stated in Corporate Governance Report.
There were seven (7) Board meetings held during the financial year ended March 312016.These were held on May 13 2015 August 3 2015 August 15 2015 November 9 2015February 10 2016 March 3 2016 and March 30 2016. The maximum interval between any twomeetings was not more than 120 days. Details of these meetings are stated in CorporateGovernance Report.
9. EXTRACT OF ANNUAL RETURN :
The extract of Annual Return as provided under Section 92(3) in Form MGT - 9 is annexedherewith as "Annexure A".
10. DIRECTORS' RESPONSIBILITY STATEMENT :
Directors confirm that :
(a) in the preparation of the annual financial statements for year ended March 312016 applicable accounting standards have been followed along with proper explanationrelating to material departures if any.
(b) they have selected and consistently applied such accounting policies judgments andestimates that are reasonable and prudent to ensure a true and fair view of the state ofaffairs of the company at the end of the financial year and of the profit of thecompany for that period;
(c) they 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 fraud and other irregularities;
(d) they have prepared the financial statements on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively and
(f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
11. CORPORATE GOVERNANCE :
Your Company places great significance to good Corporate Governance as an importantstep towards building investors' confidence improve investors' protection and maximizelong-term shareholders' value. Accordingly it has taken adequate steps to ensure that theprovisions of Corporate Governance as prescribed under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and the clauses of erstwhile Listing Agreement(till November 30 2015) are complied with.
A certificate from Practicing Company Secretary regarding compliance of conditions ofCorporate Governance is in "Annexure B" to this Report. A detailed reporton Corporate Governance forms a part of this Annual Report.
12. AUDITORS :
Statutory Auditors :
M/s Kalyaniwalla & Mistry Chartered Accountants Pune retire as the Auditors ofthe Company at the forthcoming Annual General Meeting and are eligible for re-appointment.The Directors recommend their reappointment to hold such office from conclusion of thisAnnual General Meeting until the conclusion of the next Annual General Meeting. TheCompany has received confirmation that their appointment if made will be in accordanceof the provisions of Companies Act 2013.
Internal Auditor :
Pursuant to section 138 of Companies Act 2013 the Company appointed M/s Suresh Surana& Associates LLP Chartered Accountants as internal auditor for financial year2016-17. The scope and fee of internal audit is fixed by the Board on recommendation ofAudit Committee.
Secretarial Auditor :
Pursuant to section 204 of the Companies Act 2013 the Company appointed Mr. AbhishekJagdale Company Secretary in Practice Pune as Secretarial Auditor. Based on the AuditCommittee recommendations Board has approved the appointment of Secretarial Auditor forfinancial year 201617. The Secretarial Audit Report is in "Annexure C" ofthis report.
13. WHISTLE BLOWER & VIGIL MECHANISM POLICY :
In compliance with the provisions of Section 177(9) of the Companies Act 2013 theCompany has established Whistle Blower and Vigil Mechanism Policy for its directors andemployees to report their genuine concerns and also to deal with the instances of fraudand mismanagements if any. The details of the Policy are explained in the CorporateGovernance Report and the policy is available on the website of the Companywww.tastybite.co.in
14. AUDIT COMMITTEE :
In compliance with the provisions of Section 177 of the Companies Act 2013 and ListingRegulations the Company has a duly constituted Audit Committee in place. The compositionand other relevant details of the Audit Committee are given in the Corporate GovernanceReport annexed herewith. All suggestions of Audit Committee during the year were acceptedby the Board.
15. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS :
During the year under review there is nothing to be reported under the heads loansguarantees or investments covered under the provisions of Section 186 of the CompaniesAct 2013.
16. SHARE CAPITAL :
The share capital of the Company as on March 31 2016 stands as under :
|Authorised Share Capital ||4400000 equity shares of Rs. 10/- each ||Rs. 44000000/- || |
| ||60000 1% Non-Cumulative Non-Convertible Redeemable Preference Shares of Rs. 100/- each. ||Rs. 6000000/- ||Rs. 50000000/- |
|Issued Subscribed and Paid up capital ||2566000 Equity shares of Rs. 10/- each fully paid up ||Rs. 25660000/- || |
|59530 1% Non-Cumulative Non-Convertible Redeemable Preference Shares of Rs. 100/- each fully paid up. ||Rs. 5953000/- ||Rs. 31613000/- |
During the year under review the Company has neither issued any shares withdifferential voting rights nor issued sweat equity shares. Further the Company did notgrant any stock options during the year under review. As on March 312016 details of theshares or convertibles held by Directors in the Company are as under.
|Name of Director ||No. of Equity Shares held ||No. of Covertibles held |
|Mr. Ashok Vasudevan || NIL ||NIL |
|Mrs. Meera Vasudevan (till Feb 9 2016) || NIL ||NIL |
|Mr. K. P. Balasubramaniam (till May 18 2015) ||2291* ||NIL |
|Dr. V. S. Arunachalam || NIL ||NIL |
|Mr. Ravi Nigam ||200@ ||NIL |
|Mr. Kavas Patel ||NIL ||NIL |
|Mrs. Sucharita Hegde ||NIL ||NIL |
|Mr. Masahiro Sumitomo ||NIL ||NIL |
*Out of which 1500 as joint holder @out of which 100 as joint holder
A. SEGMENT WISE OR PRODUCT WISE PERFORMANCE / NATURE OF BUSINESS
The Company operates in one segment: Prepared food consisting ready to serve productsand intermediate food products such as prepared meals frozen formed foods and sauces.There is no change in nature of business of the Company.
17. THE CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO :
The Company has been making significant efforts to ensure conservation of energy. Thedetails of energy conservation technology absorption research and development andforeign exchange earnings and outgo are as per "Annexure D".
18. RISK MANAGEMENT POLICY :
In compliance with the provisions of Section 134 of the Companies Act 2013 theCompany has identified the elements of the risks industry specific and in general aswell which in the opinion of the Board may threaten the existence of the Company. TheCompany has developed and implemented a 'Business Contingency Plan for Risk Mitigation'for the Company.
The details of the Business Contingency Plan for Risk Mitigation of the Company aregiven in the Management Discussion and Analysis.
19. CORPORATE SOCIAL RESPONSIBILITY :
The Company has a policy and a Committee for Corporate Social Responsibility incompliance with the provisions of Companies Act 2013. The details about the Policy andthe Committee are given in Corporate Governance Report annexed to this report. AnnualReport on CSR activities is annexed as "Annexure E".
As per the provisions of Section 135 of the Companies Act 2013 every Company fallingunder the applicability of Corporate Social Responsibility is required to spend 2% of itsnet profits on the activities given under Schedule VII of the Companies Act 2013 and CSRpolicy adopted by the Board of Directors. The Company has spent required amount of Rs.30.68 Lacs during the financial year 2015-16 on construction of school building inBhandgaon area and also by providing relief to flood hit Chennai in November - December2015. Both 'disaster relief' and 'education' form a part of CSR Policy ofthe Company.
Chennai Flood Relief project- Due to heavy rains and flood in November-December 2015 normal life was disturbed to a large extent in Chennai. People in Chennaiwere struggling for basic need such as food and water. As a socially responsible companyTasty Bite provided ready-to-eat food packets to flood hit people in Chennai. Theseready-to-eat food packets had "Vegetable Masala Rice" in 200 gram packets.82080 packs were specially manufactured for this flood relief. These ready-to-eat ricepackets could be consumed with or without heating directly. Company has spent Rs. 11.49lacs on disaster relief.
Construction of school building in Bhandgaon area- The Board and theCommittee decided to have a long term vision in alignment with the mission of the Company.The CSR policy of the Company states 'education' as one of the CSR areas of the Company.Hence this initiative within the local jurisdiction of the Company. The Company has spentRs. 19.19 lacs on school building construction.
20. STANDALONE FINANCIAL STATEMENTS AND POSITION OF SUBSIDIARIES ASSOCIATES AND JOINTVENTURES :
During the year under review the Company neither had a subsidiary company associatecompany nor a joint venture company. Hence comments and details on preparation offinancials on standalone basis or report on the performance of subsidiary company orassociate company nor a joint venture company are not required to be offered
21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :
The particulars of contracts or arrangements with related parties in Form AOC - 2 areannexed herewith as "Annexure F". The Board hereby informs that all therelated party transactions are carried out in the ordinary course of business and on arm'slength basis. Further the Company has duly complied with the Accounting Standard 18related to transactions with related parties of the Company. The Company has adoptedpolicy on Related Party Transactions and same is posted on website of the Company(www.tastybite.co.in)
22. SIGNIFICANT/ MATERIAL ORDERS PASSED BY COURTS/ REGULATORS IMPACTING GOING CONCERNSTATUS OF THE COMPANY :
There are no significant or material orders or awards passed by the Courts or any otherRegulators or Tribunals relating to Companies Act 2013 or Listing Agreement which wouldaffect the going concern status and Company's future operations.
23. APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL :
1. The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year 2015-16 :
|Name of Director ||Remuneration of Director (1) ||Median remuneration of employees (2) ||Ratio (3) =1/2 |
|Mr. Ashok Vasudevan ||NIL ||NIL ||NIL |
|Mrs. Meera Vasudevan ||NIL ||NIL ||NIL |
|Mr. K. P. Balasubramaniam ||NIL ||NIL ||NIL |
|Dr. V. S. Arunachalam ||NIL ||NIL ||NIL |
|Mr. Ravi Nigam ||*78.57 ||3.21 ||24.47 |
|Mr. Kavas Patel ||NIL ||NIL ||NIL |
|Mrs. Sucharita Hegde ||NIL ||NIL ||NIL |
|Mr. Masahiro Sumitomo ||NIL ||NIL ||NIL |
Remuneration including provident fund gratuity leave encashment etc and all otherstatutory dues.
2. The percentage increase in remuneration of each director Chief FinancialOfficer Company Secretary or Manager if any in the financial year;
|Name ||Designation ||Remuneration in FY 2014-15 ||Remuneration in FY 2015-16 ||Increase (in %) |
|Mr. Ravi Nigam ||Managing Director ||65.58 ||78.57 ||19.80% |
|Mr. Sohel Shikari ||Chief Financial Officer ||60.46 ||76.65 ||**26.78% (Increase in salary was made effective January 12016) |
|Ms. Minal Talwar ||Company Secretary ||6.15 ||7.94 ||29% |
** Increase based on cost to company basis inclusive of all perquisites allowances andstatutory dues such as provident fund gratuity leave encashment etc
3. Number of permanent employees are 202 on the roll of company as on March 31 2016.
4. The remuneration paid to the employees is in affirmation with Remuneration &Evaluation Policy of the Company.
5. During the year increase in remuneration of Managing Director was approved by theBoard on recommendation of Nomination & Remuneration Committee in February 10 2016meeting. The approved increase in salary is within the limit approved by the shareholdersin General Meeting on September 10 2014. Increase in salary is based on performance ofthe Company general industry standard contribution by MD in enhancement of performanceof the Company and various other factors considered appropriate by the Board andRemuneration Committee.
6. During the year increase in remuneration of Chief Financial Officer was alsoapproved by the Board in its meeting held on February 10 2016 on the recommendation ofNomination & Remuneration Committee and Audit Committee and as per the Remunerationpolicy. None among the employee received remuneration higher than that of ManagingDirector (Managerial Personnel).
7. During the year increment was also made in salary of Company Secretary on basis ofannual appraisal by the management on proportionate basis and as per the remunerationpolicy recommended by the Nomination & Remuneration Committee.
8. Average percentile increase in salaries of employees other than the managerialpersonnel in the last financial year 2016 was 17.87%. Percentile increase in themanagerial remuneration in FY 2016 was 16.73%. Increase in remuneration of MD was w.e.f.April 1 2015 and CFO w.e.f. January 1 2016. Increase in salary of employees is based onperformance of the Company general industry standard contribution by employee inenhancement of performance of the Company and various other factors considered appropriateby the Management.
9. The Company does not have a variable pay compensation structure.
10. Statement of employees receiving remuneration under Section 197(12) of CompaniesAct 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is attached as "Annexure G".
11. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease / decrease in the market quotations of the shares of the Company in comparison tothe rate at which the Company came out with the last public offer in case of listedcompanies:
|Particulars ||Issued capital ||Closing Market price per share ||Earnings per share ||Price Earnings Ratio ||Market capitalization (in Crore) |
|As on 31.03.2015 ||2566000 ||605.00 ||42.04 ||14.39 ||155.24 |
|As on 31.03.2016 ||2566000 ||1690.50 ||62.79 ||26.92 ||433.78 |
|Increase / (Decrease) ||NIL ||1085.50 ||20.75 ||12.53 ||278.54 |
|% Increase / (Decrease) ||NIL ||179.42 ||49.36 ||87.07 ||179.43 |
The Company made Public Offering in February 1987 of 750000 equity shares at Rs. 10each. The market quotation of the Equity shares of the Company as on March 312016 was Rs.1690.50 for shares of face value of Rs. 10/- each representing an increase of 16805%over the period.
24. INVESTMENTS IN ITS OWN SHARES BY COMPANY ITS SUBSIDIARIES ASSOCIATES (ETC) :
The Company during the period under review has not made investments in its own shares.The Company neither has any subsidiary company nor associate company in terms of theprovisions of Companies Act 2013 hence the comments are not required to be offered.
25. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS :
During the period under review there was no pecuniary relationship or pecuniarytransactions between the Company and its Non-Executive Directors.
26. INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2013 :
Your Company is an equal opportunity employer and safety of all employees and all otherpersons while within the premises is of utmost importance to your Company. The Company hasbeen practicing safety of women at workplace as part of its formally adopted Code ofConduct. In order to strengthen it and also in compliance to newly enacted Act forprotection of women your Company has formed Internal Complaints Committee and adopted"Policy on Prevention Prohibition and Redressal of Sexual Harassment of Women atWorkplace". The Committee's mandate is to bring awareness about ensuring safeworkplace for women; receive and take appropriate decision on complaints if any.
The Committee as appointed by the Management consists:
Ms. Anila Thomas- Presiding Officer
Ms. Minal Talwar- Member
Mr. Rajendra Jadhav- Member
Ms. Suman Bhagwat - Member
Mr. Kuldeep Joshi- Independent Member
No complaints have been received during the year.