The Board of Directors is pleased to present herewith the 26th Annual Report of yourCompany together with the Audited financial statements for the year ended 31st March2019. The Management Discussion and Analysis has been annexed to the Directors Report.
The highlights of financial results of the company are as follows: -
| || ||(Rs In lacs) |
|Particulars ||For the financial year 2019 (FY19) ||For the financial year 2018 (FY18) |
|Operating Revenues / Turnover ||8793.81 ||8178.21 |
|Profit before Depreciation & Amortization Finance charges ||2303.52 ||2832.81 |
|Depreciation & Amortization ||201.45 ||217.85 |
|Finance Charges ||10.73 ||5.72 |
|Profit / (Loss) before tax ||2091.34 ||2609.24 |
|Provision for taxation (incl. deferred tax) ||570.43 ||900.22 |
|Profit / (Loss) after tax ||1520.91 ||1709.02 |
During the year under review the Company registered slight improvement in operatingrevenues from Rs 8178.21 lac in FY18 to Rs 8793.81 lac in FY19. The revenue of theCompany was impacted due to continuing slowdown in female condom orders from South Africa.Moreover margins were impacted due to higher share of low margin male condom in overallsales one-time inventory write-off and business development expenses. In the totaloperating revenues the male condoms contributed about 59% in value terms as against 40%for the female condoms and water based lubricant jelly contributed around 1% as well. Fromthe margins standpoint our EBITDA margins stood at 27% in FY19. On an absolute basisEBITDA decreased by 19% from Rs 2832.81 lac in FY18 to Rs 2303.52 lac in FY19. At thenet profit level we closed this financial year with a net profit of Rs 1520.91 lac asagainst Rs1709.02 lac in the previous year which is a decrease of 11%.
Your Board of Directors' had declared 1st interim dividend of Re. 1 (i. e. 10%) perequity share at their meeting held on 6th November 2018. Further Board also recommendedfinal dividend of Rs 3 (i.e. 30%) per equity share for FY 2018-19 at their meeting held on29th May 2019 which is subject to approval of shareholders in the ensuing AGM. Henceduring the year the Company will pay a total dividend of Rs4.00 (i.e. 40%) per equityshare if the final dividend will approved by shareholders.
The whole of profit after tax has been transferred to Profit & Loss account.Interim Dividends are paid and 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 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 2019 is Rs 1333.80 Lac (ThirteenCrores Thirty Three Lacs and Eighty Thousand Only). During the year under review theCompany has issued bonus shares in the ratio of 1:5. As on 31st March 2019 none of theDirectors of the Company 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 2019.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:-http://www.cupidlimited.com/wp-content/uploads/2017/04/05ti002tiCGtiWhistlerblower.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 Mrs. Veena Garg Director of the Company retires by rotationat the ensuing Annual General Meeting of the Company and being eligible offers herselffor 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
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: 14th May 2018; 13th August 2018; 24th August 2018; 13th October 2018;6th November 2018; 22nd January 2019 and 18th March 2019. The intervening gap betweenthe meetings was within the period prescribed under the Companies Act 2013 and Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.
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 was appointed asStatutory Auditors of the company at 24th Annual General Meeting which was held on 7thSeptember 2017 to hold the office as Statutory Auditor from the conclusion of 24th AnnualGeneral Meeting till conclusion of 29th Annual General Meeting of the company subject toratification by the members of the company at every Annual General Meeting. M/s.Chaturvedi Sohan & Co. is willing to act as a Statutory Auditor of the company for thefinancial year 2019-20. The company has received a written consent from them vide letterdated 29th May 2019 for their reappointment and also confirmation from the said auditorsthat they are not disqualified to act as the auditors and are eligible to hold the officeas Statutory Auditors of the company.
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 is no need to ratify their appointment in the ensuing Annual GeneralMeeting 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. The observation made inSecretarial Audit Report regarding continuation of appointment of Mr. J. L. Sharma incurrent term is self-explanatory'.
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 /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 annual financial statements for the year ended 31stMarch 2019 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 2019 and of the profit of the Company for the year endedon 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 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 8065.46 Lacs (Previous year Rs 3476.70Lacs) through exports whereas the Company paid / payable foreign exchange of Rs 80.68Lacs (Previous Year Rs 85.31 Lacs) towards machinery / equipment's. Further payments madein foreign exchange of Rs 414.44 Lacs (Previous Year Rs 49.67 Lacs) towards otherexpenses.
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 athttp://www.cupidlimited.com/wp-content/uploads/2017/04/05ti001tiCGti01CSR-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 constitutedPerformance Evaluation Policy to evaluate the performance of Independent Directors and thesaid policy is available on the website of the company athttp://www.cupidlimited.com/wp-content/uploads/2017/04/ PerformancetiEvaluation.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 thecompany. Therefore the board did not proceed with the appointment of cost auditor and costaudit for the year 2019-20. 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 and hence providing theinformation in the prescribed Form AOC-1 is not applicable to the Company.
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 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 alsowish to thank its customers dealers agents suppliers and bankers for their continuedsupport and faith reposed in the Company.
| ||For and on behalf of the Board of Directors |
|CIN No. : L25193MH1993PLC070846 || |
|Website: www.cupidlimited.com || |
|Email: firstname.lastname@example.org ||Ompraksh Garg |
| ||Chairman & Managing Director |
|REGISTERED OFFICE ||DIN: 00140756 |
|A - 68 M. I. D. C. (Malegaon) Sinnar Nashik || |
|Maharashtra- 422113 || |
|Place: Mumbai || |
|Date: 27th August 2019 || |