The Board of Directors is pleased to present herewith the 24th Annual Reportof your Company together with the Audited financial statements for the year ended 31stMarch 2017. The Management Discussion and Analysis has been annexed to the DirectorsReport.
The highlights of financial results of the company are as follows: -
| || ||(Rs. In lacs) |
|Particulars ||For the financial year 2017(FY17) ||For the financial year 2016(FY16) |
|Operating Revenues/Turnover ||8521.98 ||6280.47 |
|Profit before Depreciation & Amortization Finance charges ||3461.79 ||2697.43 |
|Depreciation & Amortization ||209.80 ||192.99 |
|Finance Charges ||11.68 ||21.47 |
|Profit/(Loss) before tax ||3240.31 ||2482.97 |
|Provision for taxation (incl. deferred tax) ||1186.39 ||889.68 |
|Profit/(Loss) after tax ||2053.92 ||1593.29 |
During the period under review the Company registered an uptick of 36% in theoperating revenues from Rs.6280.47 lac in FY16 to Rs.8521.98 lac in FY17. Thisperformance was largely driven by ramp up in the institutional business both for the maleas well as female condoms. In the total operating revenues the male condoms contributedabout 43% in value terms as against 52% for the female condoms and the newly launchedwater based lubricant jelly contributed around 5% as well. From a business natureperspective the contract manufacturing business contributed close to 20% in overallsales.
From the margins standpoint our EBITDA margins stood at 40% in FY17 however onabsolute basis the margins increased at 28% from Rs.2697.4 lac in FY 16 to Rs.3461.79lac in FY17. At the net profit level we closed this financial year with a net profit ofRs.2053.92 lac as against Rs.1593.29 lac in the previous year which is an increase of29%.
Your Board of Directors' had declared 1st interim dividend of Re. 1 (i.e.10%) per equity share at their meeting held on 1st August 2016 and 2ndinterim dividend of Re. 1 (i.e. 10%) per equity share at their meeting held on 27thOctober 2016. Further Board also recommended final dividend for FY 2016-17 of Rs.2 (i.e.20%) per equity share at their meeting held on 23rd May 2017 which is subjectto approval of shareholders in the ensuing AGM. Hence during the year the Company willpay a total dividend of Rs.4 (i.e. 40%) per equity share if the final dividend is approvedby shareholders.
The whole of profit after tax has been transferred to Profit & Loss account.Interim Dividends are paid & Final Dividend provision along with Dividend DistributionTaxes are adjusted in the Profit & Loss account. There is no other amount that hasbeen proposed to be carried to any other reserves.
CHANGE IN NATURE OF BUSINESS:
The Company mainly deals in single segment i.e. Male and Female Rubber Contraceptiveshowever during the year it launched new product namely "Lubricant Jelly" whichdoes not significantly contribute to the total revenue hence no separate segment isreported.
The paid up Equity Share Capital as at 31st March 2017 is Rs.1111.50 Lac(Eleven Crores Eleven Lacs and Fifty Thousand Only). During the year under review theCompany has not issued shares with differential voting rights nor has granted any stockoptions as sweat equity. As on 31st March 2017 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 Generally Accepted Accounting Principles (GAAP) in India.The financial statements have been prepared on historical cost basis. The estimates andjudgments relating to the financial statements are made on a prudent basis so as toreflect a true and fair manner the form and substance of transactions and reasonablypresent the Company's state of affairs profits and Cash Flows for the year ended 31stMarch 2017. There is no audit qualification in financial statements by the statutoryauditors for the year under review.
LOANS GUARANTEES & INVESTMENTS
Details of Loan Guarantees and Investments covered under the provisions of Section 186of 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
All the Related Party Transactions entered by the Company are on arm's length basis andin the ordinary course of business. All the Related Party Transactions as required underAS-18 are reported in the Notes to the financial statements. Providing of information inprescribed form AOC-2 is not applicable to the company.
In accordance with the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated the Related Party Transactionspolicy and the same is uploaded on Company's website at the link:https://www.cupidltd.in/wp-content/uploads/2015/06/05_001_CG_Related_Party.pdf
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:- http://www.cupidltd.in/wp-content/uploads/2015/06/05_002_CG_Whistlerblower.pdf
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 and Mrs. Veena Garg Directors of theCompany retires by rotation at the ensuing Annual General Meeting of the Company andbeing eligible offer themselves 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 Shareholders are also requested to reappoint Mr. Pradeep Kumar Jain as IndependentDirector of the Company as mentioned in item no. 6 of notice of annual general meeting.
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
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 7 Board Meetings on thefollowing dates: 11th May 2016; 13th July 2016; 1stAugust 2016; 15th September 2016 27th October 2016; 5thJanuary 2017 and 31st January 2017. The intervening gap between the meetings was withinthe period prescribed under the Companies Act 2013 and Securities and Exchange Board ofIndia (Listing Obligations 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.
Pursuant to the provisions of Section 139 of the Companies Act 2013 and Rules madethereunder the term of office of Messrs Bhatter and Co. as the Statutory Auditors of theCompany will conclude from the close of ensuing Annual General Meeting of the Company.
The Board of Directors places on record its appreciation to the services rendered byBhatter and Co. as the Statutory Auditors of the Company.
Subject to the approval of the Members the Board of Directors of the Company hasrecommended the appointment of Messrs Chaturvedi Sohan & Co Mumbai as the StatutoryAuditors of the Company pursuant to Section 139 of the Companies Act 2013.
Accordingly the Board recommends the resolution in relation to appointment ofStatutory Auditors for the approval by the shareholders 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 having taken place affecting the financial position ofthe Company from the date of closure of financial year till the signing of Accounts.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/courts/Tribunalsthat would impact the going concern status of the Company and its future operations.
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 annual financial statements for the year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that such accounting policies as mentioned in the Notes to the Financial Statementshave been selected and applied consistently and judgement and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at 31st March 2017 and of the profit of the Company for theyear ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f. that systems to ensure compliance with the provisions of all applicable laws were inplace 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 the energy by installinglatest equipment's for conservation of energy. As a stand-by arrangement in case of nosupply of electricity of 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 is not 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.6629.46 Lacs (Previous year Rs.4425.53Lacs) through exports whereas the Company paid/payable foreign exchange of Rs.166.24 Lacs(Previous Year Rs.31.83 Lacs) towards machinery/equipment's. Further payments made inforeign exchange of Rs.151.73 Lacs (Previous Year Rs.29.12 Lacs) towards other expenses.
CORPORATE SOCIAL RESPONSIBILTY
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 at www.cupidltd.in. A detailed reportas per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 isattached 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.
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 www.cupidltd.in
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 EMPLOYEES
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 thecompany. Therefore the board did not proceed with the appointment of cost auditor and costaudit for the year 2017-18. The company is properly maintaining its cost recordinternally.
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.
Except for the historical information contained herein statements in this report andthe subsequent discussions which include words or phrases such as "will""aim" "will likely result" "would" "believe""may" "expect" "will continue" "anticipate""estimate" "intend" "plan" "contemplate" seekto" "future" "objective" "goal" "likely""project" "should" "potential" "will pursue"and similar expressions of such expressions may constitute "forward-lookingstatements" These forward looking statements involve a number of risksuncertainties and other factors that could cause actual results to differ materially fromthose suggested by the forward-looking statements. Important factors that could make adifference to the Company's operations include global and domestic demand - supplyconditions. Finished goods prices raw materials cost and availability fluctuations inexchange rates change in Government regulations and tax structure within India and thecountries of which the Company has business contacts and other factors such as litigationand industrial relations.
These risks and uncertainties include but are not limited to our ability tosuccessfully implement Company's strategy growth and expansion plans obtain regulatoryapprovals provisioning policies technological changes investment and business incomecash flow projections exposure to market risks as well as other hazards. The Company doesnot undertake any obligation to update forward-looking statements to reflect events orcircumstances after the date thereof.
Your Directors would like to express their grateful appreciation for the assistance andco-operation received from all organizations connected with its business during the yearunder review. Your Directors also wish to place on record their deep sense of appreciationfor the committed services of Executives and Staff of the Company. Your Directors are alsodeeply grateful for the confidence and faith shown by the Shareholders of the Company inthem.
| ||For and on behalf of the Board of Directors |
| ||Omprakash Garg |
| ||Chairman & Managing Director |
|CIN No. : L25193MH1993PLC070846 ||Din No: 00140756 |
|REGISTERED OFFICE || |
|A - 68 M. I. D. C. (Malegaon) Sinnar Nashik || |
|Maharashtra- 422113 || |
|Place: Mumbai || |
|Date: 20th July 2017 || |