Your Directors are pleased to present the 23rd Annual Report of the Companytogether with the audited financial statements of the Company for the year ended March 312018.
Financial Results of the Company's operation for the year under review are as follows:
| || || |
Rs. in Lakhs
|For the year ended March 31 ||2018 ||2017 |
|Net Profit before Depreciation & Taxation ||301.40 ||313.46 |
|Less : Depreciation ||60.08 ||58.66 |
|Provision for Deferred Taxation ||0.00 ||0.00 |
|Provision for Taxation / Written Off ||87.10 ||82.92 |
|Net Profit/(Loss) ||154.21 ||171.88 |
|Add : Balance from Last Year ||1907.35 ||1735.46 |
|Prior Period Profit adjustments ||0.00 ||0.00 |
|Less : Appropriation ||0.00 ||0.00 |
|Transfer to Reserves Profit / (Loss) carried to Balance Sheet ||2061.56 ||1907.35 |
In India the year 2017 was marked by some major reforms. The transformational Goodsand Services Tax (GST) was introduced from July 2017. This comprehensive tax has replacedthe complex multiple indirect tax structure in India. The competition in this businesssector intensified during the year as more brands both local and imported entered themarket to get a share of the demand. This segment was also impacted by the after-effect ofdemonetisation and the short-term challenges in implementation of GST. During the yearsales of Company's product in the distribution market was impacted as hospitals nursinghomes and distributors restricted purchases. Your Company is fully committed to the globalstandards of excellence - from design and engineering to manufacturing and service. YourCompany leverages the expertise and application knowledge of the global suturerequirements for cardiovascular sutures in particular to bring advanced atraumatic needleproduct development to its Indian Surgeons. Continuous innovation in the areas of designresearch and development of atraumatic needle simulation and validation testing andservices are the key value creation driver for our company. Within the cardiovasculardivision Centenial offers a wide range of product codes which includes over 300 codesproduced catalogue that cover applications for CABG. Your Company enjoys deepmanufacturing capabilities and know-how in Cardiovascular Sutures materials andatraumatic needles that makes it a trusted partner. Quality is of paramount importancefor your Company. It has always been your Company's goal to consistently ensure highquality and product safety in all applications. As a part of CENTENIAL's strategy your
Company has also widened the scope of quality to include two additional aspectsefficiency and reliability. Your Company has achieved continuous cost and efficiencyimprovements. At the same time your Company aims for better synchronised controlcapacity utilisation and optimised logistics. Your Company's plant is certified by ISO9001:2015 and ISO 13485:2016. In addition these ISO certifications are audited on aregular basis. Your Company's plant at Murbad Thane Maharashtra has set a benchmark interms of quality and productivity.
Fiscal 2017 - 2018 was a year of stable progress in our journey and we increasedinvestments in innovation marketing advertising and sales coverage to enhance long-termprospects for steadier sustainable sales growth. We made significant steps in ourportfolio transformation of cardiovascular atraumatic needles and general surgery codesand streamlining the product line ups in our ongoing businesses. We made this progressduring yet another challenging year. Earnings were impacted by reduced exports toBangladesh and Nepal. Despite these challenges delivered steady sales within our rangeand productivity was above our initial expectations.
The quality and safety of our products are critical to our business and the Company'sreputation of its brands form the foundation of our relationships with SURGEONS andsuppliers. Many of our brands have country wide recognition and our financial success isdirectly dependent on the success of our brands. The success of our brands can suffer ifour marketing and advertising plans or product initiatives do not have the desired impacton a brand's image or its ability to attract confidence in our SURGEONS. Our marketenvironment is highly competitive with international regional and local competitors. Inmany of the markets and industry segments in which we sell our products we competeagainst other products. Additionally many of the product segments in which we compete aredifferentiated by price tiers. We are well positioned in the industry segments and marketsin which we operate often holding a leadership or significant market share position.
Your Company has been vigorously working to keep its surgeons abreast of technologicaladvancements through revamp and upgradation of atraumatic needles with latest technologyso as to ensure better sustainability. Your Company is working on a range of newatraumatic needles and combinations of atraumatic needles and sutures products andservices to consistently exceed SURGEONS expectations. This year CENTENIAL also emphasisedon training its employees in PRODUCT THINKING for better and newer ways of marketing so asto foster a culture of innovation and substantial progress. We already have a capableorganization with immense trust and loyalty of our surgeons. As we move ahead in ourjourney we may need swift adaptation and tough decisions especially for evolving to aproduct portfolio that is more focused on latest atraumatic needles innovation. As we lookahead we see a year of continuing challenges but at the same time we are geared up tomake the company more efficient to take on the current and future competitive challenges.We are convinced that your support and cooperation will strengthen CENTENIAL. I would alsolike to express my appreciation to each of you for your support and understanding as wemove on into the new financial year with great hope.
The Financial year 2017 2018 under review witnessed fierce challenges with growingdomestic competition and changes in surgeon's preference for cardiovascular atraumaticneedles. Further details of operations are given in the management discussion and analysisreport which forms part of this report. I am also indebted to
the Highly-Educated Members of the Board for their guidance and to the Honest Loyaland Committed Employees as always. Our values always guide us and
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 Commitment Integrity andTRUST.
Financial Statements / Disclosure of Accounting Treatment in the preparation ofFinancial Statements
The financial statements of the Company have been prepared in accordance with theIndian Accounting Standards (Ind AS) notified under the Companies (Indian AccountingStandards) Rules 2015.
These are the Company's first Ind AS Financial Statements. The significant accountingpolicies which are consistently applied are set out in the Notes to the financialstatements.
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 shares capital of the Company as on March 31 2018 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 Ms. Anuradha Kashikar Executive Director of the Company retires by rotation atthe 23rd AGM and being eligible offered herself for re-appointment. The Boardof Directors on the recommendation of the Nomination and Remuneration Committee hasre-appointed Ms. Anuradha Kashikar (DIN:00804831) as whole Time Director of the Companyfor a period of 03 (Three) years with effect from April 1 2018 subject to approval ofshareholders.
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 Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements [LODR]) Regulations 2015 ("Listing Regulations"). The Board hasIndependent Non-Executive Director based on fit and proper criteria ~ qualificationexpertise track record integrity etc. With the enactment of the Companies Act 2013(the Act') it is mandatory for every listed Company to appoint requisite number ofIndependent Directors' as defined in Section 149(6) of the Companies Act 2013. TheCompany in compliance with the Listing Agreement has already appointed Shri Sunil C.Modi Shri Bhushan S. Limaye Shri Jagadish B. Shetty and Shri Neel M. Vora as IndependentNon-Executive Directors of the Company on the Board. The Board is of the opinion that theexisting Independent Directors fulfil the criteria as specified in Section 149 of theCompanies Act 2013 & the Rules made thereunder. Brief profile of the Directorsproposed to be appointed / re-appointed and other information as stipulated under ListingRegulations and Secretarial Standard 2 are part of the Corporate Governance Report annexedto 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 covered under Section 186 of the Companies Act 2013are NIL during Financial Year 2017 ~ 2018.
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 2017 ~ 2018 the Board ofDirectors of the Company met 04 (Four) times. The Meeting details are provided in theCorporate Governance report that forms part of this Annual Report The maximum intervalbetween any two meetings did not exceed 120 days as prescribed in the Companies Act 2013.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 14 2018 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)
The detailed note on the composition of the Board and its committee is provided in theCorporate Governance Report.
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 theapplicable accounting standards had been followed along with proper explanation relatingto material departures; (b) The Directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit and loss of the Company for that period; (c) TheDirectors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; (d)The Directors had prepared the annual accounts on a going concern basis; (e) The Companyis responsible for establishing and maintaining adequate and effective internal financialcontrols with regard to its business operations and in the preparation and presentationof the financial statements in particular the assertions on the internal financialcontrols in accordance with broader criteria established by the Company. Towards the aboveobjective the Directors have laid down internal financial controls based on internalcontrols framework established by the Company which in all material respects wereoperating effectively as at March 31 2018. (f) The Directors have devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems areadequate and operating effectively. The Company has substantially complied with materialprovisions of such acts and regulations as 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. Particulars of Contracts or arrangementswith related parties referred to in Section 188(1) of the Companies Act 2013 in theprescribed from AOC 2 is appended as Annexure F to the Directors' Report.
Explanation or comments on Qualifications Reservations or Adverse Remarks orDisclaimers made by the Auditors and the Practicing Company Secretary in their Reports
The Auditors' Report does not contain any qualifications reservations or adverseremarks but Secretarial Audit Report contains qualifications pursuant to Section 203 ofCompanies Act 2013 towards non-appointment of Company Secretary and Regulations 31 (2) ofListing Regulations for dematerialisation of Promoters shareholding. The Company wouldlike to inform that Promoters are having difficulty establishing contact and hence it verydifficult to convert each Promoter's physical shareholding into demat and whenever theCompany establishes the contact the conversion of the same as per Regulations 31 (2) ofListing Regulations will be completed. Further the Company has undertaken various effortslike placing advertisements in the local newspapers for appointment of Company Secretaryand has yet to receive a suitable candidate. The Company will continue its 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.
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 23rd 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 23rd AGM and pursuant tothe provisions of Section 139 142 and all other applicable provisions if any of theCompanies Act 2013 read with Rule 3(7) of the Companies (Audit and Auditors) Rules 2014(including any statutory modification(s) or re-enactment thereof for the time being inforce) the Company appoints Messrs A. Vijay Kumar & Co. Chartered Accountants (FirmRegistration No. 009824S) as the Statutory Auditor of the Company for the second term of 5(Five) Consecutive years to hold office from the conclusion of this meeting until theconclusion of the Twenty Eight Annual General Meeting of the Company on such Remunerationof Rs.1.25 Lakhs plus applicable tax and out of pocket expenses for the financial year2018 - 2019 as recommended by the audit committee and as may be mutually decided by the
Managing Director of the Company and the Statutory Auditors" (subject toratification of their appointment at every AGM) at such remuneration plus service taxout of pocket expenses as may be mutually agreed between the Managing Director of theCompany and the Auditors. Messrs A. Vijay Kumar & Co. have given a certificate to theeffect that the re-appointment if made would be within the limits prescribed underSection 139 of the Companies Act 2013. Your Directors recommend their re-appointment.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshad appointed M/s. H S Associates Practising Company Secretaries to conduct theSecretarial Audit of the Company for the Financial Year 2017 ~
20 18. The Secretarial Auditor's Report is annexed as Annexure B and forms an integralpart of this Report.
Reporting of frauds by Auditors
During the year under review the Statutory Auditors and the Secretarial Auditor havenot reported to the Audit Committee under Section 143(12) of the Companies Act 2013 anyinstance of fraud committed in the Company by its officers or employees.
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 E.
Corporate Governance Code
In compliances with Regulation 34 of the Listing Regulations a Report of CorporateGovernance is included in the Annual Report and the certificate from Messrs H. S.Associates Company Secretaries confirming the compliance of conditions on CorporateGovernance is annexed thereto. ~ Annexure B
Management discussion and analysis
Management's Discussion and Analysis Report for the year under review as stipulatedunder the Listing Regulations is presented in a separate section forming part of theAnnual 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 C tothe Directors' 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 D to the Directors' 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 Utsav Shah & Associates CharteredAccountants are appointed with scope of the Internal Audit duly approved by the AuditCommittee. To maintain its objectivity and independence the Internal Auditor reports tothe Audit Committee. The Internal Auditor evaluates the adequacy of the internal controlsystem in the Company on the basis of statement of operations procedure instructionmanuals 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.
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.
Familiarisation Programme for Independent Directors
The details of training and familiarisation programme are provided in the CorporateGovernance Report. Further at the time of appointment of an Independent Non-ExecutiveDirector the Company issues a formal letter of appointment outlining his / her rolefunction duties and responsibilities. The format of the letter of appointment isavailable on our website : http://www.centenialindia.com/code_of_conduct/
Policy on Directors Appointment and Remuneration
The policy of the Company on Director's appointment and remuneration including thecriteria for determining qualifications positive attributes Independence of a Directorand other matters as required under sub section (3) of Section 178 of the Companies Act2013. The details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future. Duringthe year there has been no significant material orders passed by the regulators or courtsor tribunals impacting the going concern status and Company's operations in future.
Corporate Social Responsibility
The Provisions of Section 134(3)(o) and Section 135 of the Companies Act 2013 readwith Rule 8 of Companies (CSR Policy) Rules 2014 regarding corporate socialresponsibility do not apply to the company for the period under review.
CRISIL continued to reaffirm their rating of "BBB / Stable" and"A3+" 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
| ||Vijay MAJREKAR |
|Place of Signature : Mumbai Maharashtra ||Managing Director |
|Date: August 9 2018 ||DIN: 00804808 |
|Registered Office : || |
|Corporate Identification Number: L99999MH1995PLC089759 || |
|F-29 MIDC Murbad Thane 421401. MAHARASHTRA. || |
|Email : email@example.com / Website : www.centenialindia.com |
|Tel: (2524) 222905 / Fax : (2524) 222872 || |