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Tasty Bite Eatables Ltd.

BSE: 519091 Sector: Agri and agri inputs
NSE: TASTYBITE ISIN Code: INE488B01017
BSE 15:40 | 19 Feb 8004.15 54.10
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NSE 15:31 | 19 Feb 8007.35 43.35
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OPEN 7995.35
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VOLUME 559
52-Week high 11090.00
52-Week low 4410.00
P/E 76.61
Mkt Cap.(Rs cr) 2,057
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 7995.35
CLOSE 7950.05
VOLUME 559
52-Week high 11090.00
52-Week low 4410.00
P/E 76.61
Mkt Cap.(Rs cr) 2,057
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tasty Bite Eatables Ltd. (TASTYBITE) - Director Report

Company director report

To

The Members

Your Directors are pleased to present the thirty-third Annual Report together withAudited Statement of Accounts for the year ended 31st March 2017.

1. KEY FINANCIAL HIGHTLIGHTS

(Rs. Lakh)

Highlights

FY 2016-17

FY 2015-16
Revenue from operations 25534.41 20876.23
Profit before Depreciation Interest and Tax 4536.05 3434.96
Profit after tax 2275.62 1611.99
Earnings per share (Rs./share - Basic and diluted) 88.68 62.79
Net Fixed Assets 7395.71 6145.27
Long term borrowings (excluding current portion) 3603.70 1974.35
Profit/ (Loss) transferred to Balance Sheet 2275.62 1611.99

2. FINANCIAL PERFORMANCE & OPERATIONS :

Your Company grew at a healthy Y-O-Y rate of 22% to achieve revenues of Rs. 255.3 Croreduring the year against Rs. 208.8 Crore in the previous financial year. The exports ledConsumer Business grew 22% to Rs. 160.1 Crore against Rs. 130.8 Crore in the previous yearwhile the Tasty Bite Food Service (TFS) business registered a growth of 18% with revenuesof Rs. 76.9 Crore against Rs. 64.9 Crore in the previous year.

Tasty Bite continues to retain its position of market leadership in its key marketsincluding the US Canada Australia and New Zealand. The Company also entered UnitedKingdom market this year.

Profit after Tax for the year ended at Rs. 22.8 Crore against Rs. 16.1 Crore in FY 16.

3. DIVIDEND:

The Board of Directors at their meeting held on May 16 2017 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 2016-17.

The total dividend payout on equity shares would involve a cash outgo of Rs. 51.32lakhs and dividend tax of Rs. 10.44 lakhs. Dividend payout on preference shares is of Rs.0.60 lakhs and dividend tax of Rs. 0.12 lakhs.

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 25 2017. 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 25 2017.

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 11% of the company'srevenues.

5. FINANCE :

During the year Company availed an External Commercial Borrowing (ECB) of USD 0.9Million for expansion of its manufacturing capacity and Buyer's Credit of USD 1.1 millionfrom Bank of Tokyo Mitsubishi UFJ Ltd (BTMU). ECB of USD 2.5 Million was also availed bythe Company from BTMU for expansion of manufacturing capacity. Kotak continues to provideworking capital facility of INR 110.00 million to the Company. The Company alsoestablished a working capital credit facility of USD 1 Million from Mizuho Bank Limited.The Company continues its relationship with Ratnakar Bank Limited (RBL) for workingcapital requirements with a facility limit of INR 100.00 million. ECB of USD 3.4 millionwas also availed from Mizuho Bank Ltd in 2015 against which the Company makes repaymentas per schedule.

The Company successfully repaid as per schedule the ECB of USD 1 million availed fromPreferred Brands International Inc in December 2016 quarter fully.

Total long term borrowing (excluding current portion) stood at Rs. 36.04 Crore as of31st March 2017 against Rs. 19.74 Crore as of 31st March 2016.

6. FIXED DEPOSITS :

The Company has not accepted or invited any deposits from the public during the yearunder review.

7. DIRECTORS :

Mrs. Sucharita Hegde and Mr. Masahiro Sumitomo were regularized as directors in AnnualGeneral Meeting (AGM) of shareholders held on September 19 2016. Mrs. Hegde was alsoappointed as independent director in AGM for a term of 5 years.

All independent directors have provided declaration stating their independence underthe provisions of section 149 of Companies Act 2013 ("Act") and SEBI (ListingObligation 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. Masahiro Sumitomo 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 Obligation andDisclosure Requirements) Regulation 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 inCorporate Governance Report.

Meetings :

There were six (6) Board meetings held during the financial year ended March 31 2017.These were held on May 7 2016 August 8 2016 November 7 2016 January 19 2017January 30 2017 and March 24 2017. The maximum interval between any two meetings was notmore than 120 days. Details of these meetings are stated in Corporate Governance Report.

8. EXTRACT OF ANNUAL RETURN :

The extract of Annual Return as provided under Section 92(3) in Form MGT - 9 is annexedherewith as

"Annexure A".

9. DIRECTORS' RESPONSIBILITY STATEMENT :

Directors confirm that :

(a) in the preparation of the annual accounts for the year ended March 31 2017applicable accounting standards have been followed along with proper explanation relatingto 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 the companyfor that period;

(c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) they have prepared the financial statements/ annual accounts on a going concernbasis;

(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.

10. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION

143(12):

During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board of Directors under section 143(12) of Companies Act 2013.

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 Obligation andDisclosure Requirement) Regulation 2015.

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 LLP existing statutory accountants shall retire byrotation at the ensuing Annual General Meeting pursuant to provisions of the CompaniesAct 2013. The Directors recommend M/s BSR & Associates LLP to be appointed as thestatutory auditors and hold such office from conclusion of this Annual General Meetinguntil the conclusion of 38th Annual General Meeting subject to ratification each year bythe shareholders. The Company has received confirmation that their appointment if madewill be in accordance of the provisions of the 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 year2017-18. 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 2017-18. The Secretarial Audit Report is in "Annexure C"of this report.

The Secretarial auditor has observed that shorter notice was provided to stock exchangew.r.t. Book Closure for dividend and Annual General Meeting declaration and publishingfinancial results of the last quarter of FY 2015-16 in the news papers beyond prescribedtime. The directors have taken a note of the same and care shall be taken for timelycompliance henceforth.

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 ListingObligation Regulations the Company has a duly constituted Audit Committee in place. Thecomposition and other relevant details of the Audit Committee are given in the CorporateGovernance Report annexed herewith. All suggestions of Audit Committee during the yearwere accepted by 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 2017 stands as under:

Authorised 4400000 equity shares of Rs. 44000000/-
Share Capital Rs. 10/- each
60000 1% Non-Cumulative Rs. 6000000/- Rs. 50000000/-
Non-Convertible Redeemable Preference Shares of Rs. 100/- each.
Issued 2566000 Equity shares of Rs. 10/- each fully paid up Rs. 25660000/-
Subscribed and
Paid up capital 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 31 2017 details of theshares 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
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 100 as joint holder

There are no convertible instruments issued by the Company.

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 AND OUTGO:

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.25.52 Lakh during the financial year 2016-17 on construction of school building inBhandgaon area. 'Education' forms a part of CSR Policy of the Company. Unspent amount ofRs. 4.85 lakh is carried forward by the company to be spent in financial year 2017-18.

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 or a joint venture company are not required to be offered.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of material contracts or arrangements with related parties in Form AOC- 2 are annexed herewith as "Annexure F". The Board hereby informs thatall the related party transactions are carried out in the ordinary course of business andon arm's length basis. Further the Company has duly complied with the Accounting Standard18 related 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 CONCERN STATUS 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 2016-17:

(Rs. in Lacs)

Name of Director Remuneration of Director (1) Median remuneration of employees (2) Ratio (3) =1/2
Mr. Ashok Vasudevan —— NIL —— —— NIL —— —— NIL
Dr. V. S. Arunachalam —— NIL —— —— NIL —— —— NIL
Mr. Ravi Nigam 114.04 4.02 28.37
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;

(Rs. in Lakh)

Name Designation Remuneration in FY 2015-16

Remuneration in FY 2016-17

Increase (in %)
Mr. Ravi Nigam Managing Director 78.57 114.04 45.14%
Mr. Sohel Shikari Chief Financial Officer 76.65 112.06 46.20%
Ms. Minal Talwar Company Secretary 7.94** 8.41** 5.92%

Increase based on cost to company basis inclusive of perquisites allowances andstatutory dues such as provident fund gratuity leave encashment etc.

**In addition to the above the Company Secretary receives consideration w.r.t. ValuePool Agreement with the holding company.

3. Number of permanent employees are 216 as on March 31 2017.

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 January 19 2017meeting. The approved increase in salary is within the limit approved by the shareholdersin General Meeting on September 19 2016. 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 January 19 2017 on the recommendation ofNomination & Remuneration Committee and Audit Committee and as per the Remunerationpolicy. None among the employees 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 2017 was 25.70%. Percentile increase in themanagerial remuneration in FY 2017 was 45.14%. Increase in remuneration of MD and CFO wasw.e.f. January 1 2017. Increase in salary of employees is based on performance of theCompany general industry standard contribution by employee in enhancement of performanceof the Company and various other factors considered appropriate by 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 over/decrease in the market quotations of the shares of the Company in comparisonto the 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 31.03.2016 2566000 1690.50 62.79 26.92 4337823000
As on 31.03.2017 2566000 4658.50 88.68 52.53 11953711000
Increase / (Decrease) NIL 2968.00 25.89 25.61 7615888000
% Increase / (Decrease) NIL 175.57 41.23 95.12 175.57

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 31 2017 wasRs. 4658.5 for shares of face value of Rs. 10/- each representing an increase of 46485%over the period.

23. INVESTMENTS IN ITS OWN SHARES BY COMPANY ITS SUBSIDIARIES ASSOCIATES ETC):

The Company during the period under review has not made investment 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.

24. 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.

25. 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.