The Board of Directors is pleased to present herewith the 27th Annual Reportof your Company together with the Audited financial statements for the year ended 31 stMarch 2020. The Management Discussion and Analysis has been annexed to the DirectorsReport.
The highlights of financial results of the company are as follows: -
|Particulars ||For the financial year 2020 (FY20) ||For the financial year 2019 (FY19) |
|Operating Revenues / Turnover ||16464.54 ||8793.81 |
|Profit before Depreciation & Amortization Finance charges ||5573.22 ||2303.52 |
|Depreciation & Amortization ||249.96 ||201.45 |
|Finance Charges ||52.85 ||10.73 |
|Profit / (Loss) before tax ||5270.41 ||2091.34 |
|Provision for taxation (incl. deferred tax) ||1286.35 ||570.43 |
|Profit / (Loss) after tax ||3984.06 ||1520.91 |
During the year under review the Company registered supreme improvement in anoperating revenues from Rs. 8793.81 lac in FY19 to Rs. 16464.54 lac in FY20 amidststrong demand for Male and Female Condoms in the exports market. Commencement of export ofFemale Condoms to Brazil along with other new and repeat orders led to substantial growthin revenues. EBITDA margins improved to 34.6% in FY20 against 27.0% in FY19 on the back ofcost reduction due to increased production capacity. In the total operating revenues theMale Condoms contributed about 39% in value terms as against 59% for the Female Condomsand Water Based Lubricant Jelly and Hand Sanitiser collectively contributed around 2% aswell.
From the margins standpoint our EBITDA margins stood at 34.6% in FY20. On an absolutebasis EBITDA increased by 142% from Rs. 2303.52 lac in FY19 to Rs. 5573.22 lac in FY20.At the net profit level we closed this financial year with a net profit of Rs. 3984.06lac as against Rs. 1520.91 lac in the previous year which is an increase of
IMPACT OF COVID 19 PANDEMIC:
In March 2020 the World Health Organisation (WHO) declared COVID-19 a global pandemic.Consequent to this Government of India declared nation-wide lockdown on March 24 2020which has impacted normal business operations of the Company. The Company has assessed theimpact of this pandemic on its business operations and has considered all relevantinternal and external information to determine the impact on the Company's revenue fromoperations for foreseeable future. As the situation is unprecedented while the lockdownis gradually lifting the Company is closely monitoring the situation as it evolves in thefuture. The Company has resumed its business activities in line with guideline issued bythe Government authorities The Company does not anticipate any challenges in its abilityto continue as going concern or meeting its financial obligations.
Your Board of Directors' had declared 1st interim dividend of Re. 1 (i. e.10%) per equity share at their meeting held on 11th November 2019 and 2ndinterim dividend of Rs. 3.50 (i. e. 35%) per equity share at their meeting held on 4thMarch 2020. Hence during the year the Company declared and paid a total dividend of Rs.4.50 (i.e. 45%) per equity share.
The whole of profit after tax has been transferred to Profit & Loss account.Interim Dividends are paid and there is no other amount that has been proposed to becarried to any other reserves.
CHANGE IN NATURE OF BUSINESS
The Company manufactures Male and Female Rubber Contraceptives and Lubricant Jelly.There is no any change in the business carried on by the company during the year underreview.
The paid up Equity Share Capital as at 31st March 2020 is Rs. 1333.80 Lac(Thirteen Crores Thirty Three Lacs and Eighty Thousand Only). During the year underreview the Company has not issued shares with differential voting rights nor has grantedany stock options as sweat equity. As on 31st March 2020 none of the Directors of theCompany hold instruments convertible into equity shares of the Company.
FINANCE AND ACCOUNTS
Your Company prepares its financial statements in compliances with the requirements ofthe Companies Act 2013 and the Indian Accounting Standard (IND AS). The financialstatements have been prepared on historical cost basis. The estimates and judgmentsrelating to the financial statements are made on a prudent basis so as to reflect in atrue and fair manner the form and substance of transactions and reasonably present theCompany's state of affairs profits and Cash Flows for the year ended 31st March 2020.There is no audit qualification in financial statements by the statutory auditors for theyear under review.
LOANS GUARANTEES & INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
The Company has not accepted any deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 or under Chapter V of the Act.
RELATED PARTY TRANSACTIONS
The Company has not entered into any contracts or arrangements with related partiesreferred to in Section 188 of the Companies Act 2013 and providing the information in theprescribed Form AOC-2 are not applicable to the Company. There are no transactions withrelated parties except those indicated in notes to accounts.
INTERNAL CONTROL SYSTEMS
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism to deal with instance of fraud and mismanagement ifany. It ensures that strict confidentiality is maintained whilst dealing with concerns andalso no discrimination will be meted out to any person for a genuinely raised concern. Anysuspected or confirmed incident of fraud / misconduct can be reported thereof.
The Whistle Blower Policy has been posted on website of the Company at below link:-https://www.cupidlimited.com/wp-content/uploads/2020/07/05_002_CG_Whistlerblower.pdfRISK MANAGEMENT
There is a continuous process for identifying evaluating and managing significantrisks faced through a risk management process designed to identify the key risks facingbusiness. During the year a risk analysis and assessment was conducted and no major riskswere noticed.
PERFORMANCE EVALUATION OF BOARD
Pursuant to the provisions of the Companies Act 2013 and Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardhas carried out an annual performance evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration and other Committees. The same is found to be satisfactory.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
At the time of appointing a Director a formal letter of appointment is given to himwhich inter alia explains the role function duties and responsibilities expected of himas a Director of the Company. The Director is also explained in detail the Compliancerequired from him under the Companies Act 2013 Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations 2015 and other relevantregulations and affirmation taken with respect to the same.
Further the Company has put in place a system to familiarize the Independent Directorsabout the Company its products business and the on-going events relating to the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Omprakash Garg Director of the Company retires byrotation at the ensuing Annual General Meeting of the Company and being eligible offershimself for re-appointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
The following are the Key Managerial Personnel of the company: Mr. Omprakash Garg: -Chairman and Managing Director
Mr. Saurabh V. Karmase: - Company Secretary and Compliance Officer Mr. Narendra M.Joshi: - Chief Financial Officer
1. Mr. Suresh Chand Chhangamal Garg was appointed as an Additional Director(Non-executive & Non-Independent) w.e.f. 26th August 2020.
2. Ms. Nalini Madhusudan Mishra was appointed as an Additional Director (Non-executive& Independent) w.e.f. 26th August 2020.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report on the operations of the Company asrequired under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isprovided in a separate section and forms an integral part of this Report.
During the year under review the Company has conducted 6 Board Meetings on thefollowing dates: 29th May 2019; 22nd July 2019; 27thAugust 2019; 11th November 2019; 18th January 2020 and 4thMarch 2020. The intervening gap between the meetings was within the period prescribedunder the Companies Act 2013 and Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.
COMMITTEES OF THE BOARD
The Board of Directors has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
The details of the Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.
M/s. Chaturvedi Sohan & Co. Chartered Accountants Mumbai were appointed asStatutory Auditors of the company at 24th Annual General Meeting which was heldon 7th September 2017 to hold the office as Statutory Auditor from theconclusion of 24th Annual General Meeting till conclusion of 29thAnnual General Meeting of the company subject to ratification by the members of thecompany at every Annual General Meeting.
Further as per the Companies (Amendment) Act 2017 the provision of ratification bythe members at every Annual
General Meeting has been deleted w.e.f. 7th May 2018. Accordingly there isno need to ratify their appointment in the ensuing Annual General Meeting of the company.
As required under Section 204 of the Companies Act 2013 Secretarial Audit Report asobtained from Mr. Shailesh Kachalia Practising Company Secretary is annexed as"annexure 1" and forms part of the Board Report.
OBSERVATIONS AUDITOR & SECRETARIAL AUDITOR
There are no qualifications contained in the Auditors Report and Secretarial AuditReport
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form No. MGT-9 as provided under Section 92 of theCompanies Act 2013 is annexed as "annexure 2" and forms part of the BoardReport.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thisReport other than the impact of COVID-19 on the business operations of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / courts /Tribunals that would impact the going concern status of the Company and its futureoperations.
ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental regulations and preservation ofnatural resources.
DISCLOSURE IN TERMS OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company took all necessary measures to ensure a harassment free workplace and hasinstituted an Internal Complaints Committee for redressal of complaints and to preventsexual harassment. No complaints relating to sexual harassment were received during theyear.
As per Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate section on Report on CorporateGovernance' practices followed by the Company together with a certificate from theAuditors' of the Company confirming compliances forms integral part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134 (3) (c) of the Companies Act 2013: a. that in the preparation of the annualfinancial statements for the year ended 31st March 2020 the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any; b. that such accounting policies as mentioned in the Notes to theFinancial Statements have been selected and applied consistently and judgement andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2020 and of theprofit of the Company for the year ended on that date; c. that proper and sufficient carehas been taken for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; d. that the annual financialstatements have been prepared on a going concern basis; e. that proper internal financialcontrols were in place and that the financial controls were adequate and were operatingeffectively; f. that systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.
CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTION
A) Conservation of Energy:-i. The Company has taken all effective steps to conserve theenergy by installing latest equipment's for conservation of energy. As a stand-byarrangement in case of no supply of electricity the Company has installed generator set.ii. The cumulative effect of the Energy conversations steps taken by the Company hasconsiderably reduced the consumption of Energy and saved the cost. iii. The Company hasinstalled Solar in its manufacturing facility for Energy conversation. iv. The Company isnot required to mention per unit consumption of Energy in "form A".
B & C) Technology Absorption and Expenditure on Research & Development:-
The Company has deployed indigenous technology to manufacture its products. The Companyis also taking steps to upgrade its technology to improve the quality of its product so asto make same cost effective and compete in international market.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has earned foreign exchange of Rs. 13952.99 Lacs (Previous year Rs.8065.46 Lacs) through exports whereas the Company paid / payable foreign exchange of Rs.95.73 Lacs (Previous Year Rs. 80.68 Lacs) towards machinery / equipment's. Furtherpayments made in foreign exchange of Rs. 3639.30 Lacs (Previous Year Rs. 414.44 Lacs)towards other expenses.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 the Board of Directors ofyour Company has constituted a Corporate Social Responsibility ("CSR") Committeewhich is chaired by Mr. Pradeep Kumar Jain Independent Director of the Company the othermembers of the committee are Mr. Omprakash Garg Chairman and Managing Director and Mr.Jandhyala L. Sharma Independent Director. Your Company also has in place a CSR policy andthe same is available on the website of the Company athttps://www.cupidlimited.com/wp-content/uploads/2020/07/05_001_ CG_01CSR-Policy.pdf. Adetailed report as per Rule 8 of the Companies (Corporate Social Responsibility Policy)Rules 2014 is attached as "Annexure 3" forming part of this report.
The Audit Committee now headed by Shri. Pradeep Kumar Jain as Chairman of thecommittee. Shri. Omprakash Garg and Shri. Jandhyala L. Sharma are Members. The details ofall related party transactions if any are placed periodically before the AuditCommittee. During the year there were no instances where the Board had not accepted therecommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee is headed by Shri. Pradeep Kumar Jain asChairman of the committee. Shri. Jandhyala L. Sharma and Mrs. Veena Garg are the membersof committee. During the year there were no instances where the Board had not accepted therecommendations of the Nomination and Remuneration Committee.
STAKEHOLDER RELATIONSHIP COMMITTEE
The Stakeholder Relationship Committee is headed by Shri. Pradeep Kumar Jain asChairman of the committee. Mr. Omprakash Garg and Mrs. Veena Garg are the members ofcommittee. During the year there were no instances where the Board had not accepted therecommendations of the Stakeholder Relationship Committee.
PERFORMANCE EVALUATION CRITERIA FOR INDEPENDENT DIRECTORS:
Pursuant to the provisions of the Companies Act 2013 and regulation 17 of Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the performance evaluation of the Independent Directors is carried out by othernon-independent directors on the basis of their contribution towards important aspects ofthe company and active participation on the board. The Directors express theirsatisfaction with the evaluation process.
Further the company have constituted Performance Evaluation Policy to evaluate theperformance of Independent Directors and the said policy is available on the website ofthe company at https://www.cupidlimited.com/wp-content/uploads/2020/07/Performance_Evaluation.pdf
REMUNERATION OF DIRECTORS
Pecuniary Relationship or Transactions with the Non-Executive Directors:
There was no any pecuniary relationship or transaction took place between the companyand its non-executive directors.
Criteria of making payments to non-executive directors:
Company is paying the sitting fees to all the non-executive directors as decided by theboard for attending the board meetings and various committee meetings. Further Companyreimburses out of pocket expenses incurred by all the non-executive directors of theCompany in connection with various affairs of the company.
PARTICULARS OF EMPLOYEE
The disclosure required under section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isattached as "Annexure 4".
The statement of particulars of employees pursuant to Rule 5 (2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of thisAnnual Report and attached as "Annexure 5".
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The Company takes pride in the competence dedication and commitment of its employeesin all sectors of the business. The Company has a structured training and managementdevelopment programs to upgrade skills of employees of the company. Objective appraisalsystems are in place for senior management staff.
The Company is committed to enhancing and retaining its top talent through superiorlearning and organizational development. This is a part of our Human Resource function andis an essential pillar to support the organization's growth and its sustainability in thelong run.
The company is strongly giving emphasis on maintaining its current industrial relationsand developing the new ones.
As per the Companies (cost records and audit) Rules 2014 and the amendments madethereof notified by
Ministry of Corporate Affairs cost audit is not applicable to the company. Thereforethe board did not proceed with the appointment of cost auditor and cost audit for the year2020-21. The company is properly maintaining its cost record internally.
SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES
Company doesn't have any Subsidiaries or Joint Ventures or Associate companies as onthe report date as defined under the Companies Act 2013 and hence providing theinformation in the prescribed Form AOC-1 is not applicable to the Company.
Statements in this Directors' Report and Management Discussion and Analysis Reportdescribing the Company's objectives projections estimates expectations or predictionsmay be forward-looking statements' within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.Important factors that could make difference to the Company's operations include rawmaterial availability and its prices cyclical demand and pricing in the Company'sprincipal markets changes in Government regulations Tax regimes economic developmentswithin India and other ancillary factors.
Your Directors would like to express their grateful appreciation for the contributionmade by the employees at all levels. Your Directors are also deeply grateful for theconfidence and faith shown by the Shareholders of the
Company in them. Your Directors also wish to thank its customers dealers agentssuppliers and bankers for their continued support and faith reposed in the Company.
For and on behalf of the Board of Directors
Chairman & Managing Director
Din No: 00140756
CIN No. : L25193MH1993PLC070846
A - 68 M. I. D. C. (Malegaon) Sinnar Nashik
Place: Ohio USA
Date: 5th November 2020